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received 

JUN 17 1988 
LAW LIBRARY 



The 
NORTH CAROLINA 

REGISTER 



IN THIS ISSUE 



FINAL DECISION LETTERS 



PROPOSED RULES 
Administration 
Commerce 
Housing Finance 
Human Resources 
Insurance 
NRCD 

FINAL RULES 
Revenue 
Transportation 



LIST OF RULES AFFECTED 



ISSUE DATE: JUNE 15, 1988 



Volume 3 • Issue 6 • Pages 185-266 



INFORMATION ABOUT THE NORTH CAROLINA REGISTER AND ADMINISTRATIVE CODE 



NORTH CAROLINA REGISTER 

The North Carolina Register is published bi-monthly 
and contains information relating to agency, executive, 
legislative and judicial actions required by or affecting 
Chapter 150B of the General Statutes. All proposed, ad- 
ministrative rules and amendments filed under Chapter 
150B must be published in the Register. The Register 
will typically comprise approximately fifty pages per 
issue of legal text. 

State law requires that a copy of each issue be pro- 
vided free of charge to each county in the state and to 
various state officials and institutions. The North 
Carolina Register is available by yearly subscription at 
a cost of ninety-five dollars ($95.00) for 24 issues. 

Requests for subscriptions to the North Carolina 
Register should be directed to the Office of Ad- 
ministrative Hearings, P. 0. Drawer 1 1666, Raleigh, N. 
C. 27604, Attn: Subscriptions. 

ADOPTION, AMENDMENT, AND REPEAL OF 
RULES 

An agency intending to adopt, amend, or repeal a rule 
must first publish notice of the proposed action in the 
North Carolina Register. The notice must include the 
time and place of the public hearing; a statement of how 
public comments may be submitted to the agency either 
at the hearing or otherwise; the text of the proposed 
rule or amendment; a reference to the Statutory 
Authority for the action and the proposed effective date. 

The Director of the Office of Administrative Hearings 
has authority to publish a summary, rather than the 
full text, of any amendment which is considered to be 
too lengthy. In such case, the full text of the rule con- 
taining the proposed amendment will be available for 
public inspection at the Rules Division of the Office of 
Administrative Hearings and at the office of the pro- 
mulgating agency. 

Unless a specific statute provides otherwise, at least 
30 days must elapse following publication of the pro- 
posal in the North Carolina Register before the agency 
may conduct the required public hearing and take ac- 
tion on the proposed adoption, amendment or repeal. 

When final action is taken, the promulgating agency 
must file any adopted or amended rule for approval by 
the Administrative Rules Review Commission. Upon ap- 
proval of ARRC, the adopted or amended rule must be 
filed with the Office of Administrative Hearings. If it 
differs substantially from the proposed form published 
as part of the public notice, upon request by the agen- 
cy, the adopted version will again be published in the 
North Carolina Register. 

A rule, or amended rule cannot become effective 
earlier than the first day of the second calendar month 
after the adoption is filed with the Office of Ad- 
ministrative Hearings for publication in the NCAC. 

Proposed action on rules may be withdrawn by the 
promulgating agency at any time before final action is 
taken by the agency. 

TEMPORARY RULES 

Under certain conditions of an emergency nature, 
some agencies may issue temporary - rules. A temporary 
rule becomes effective when adopted and remains in 



effect for the period specified in the rule or 180 days 
whichever is less. An agency adopting a temporary rul 
must begin normal rule-making procedures on the per- 
manent rule at the same time the temporarv rule is 
adopted. 

NORTH CAROLINA ADMINISTRATIVE CODE 

The North Carolina Administrative Code (NCAC) is 
a compilation and index of the administrative rules of 
25 state agencies and 38 occupational licensing boards 
The NCAC comprises approximately 15,000 letter size 
single spaced pages of material of which approximate- 
ly 35% is changed annually. Compilation and publica 
tion of the NCAC is mandated by G.S. 150B-63(b). 

The Code is divided into Titles and Chapters. Each 
state agency is assigned a separate title which is fur- 
ther broken down by chapters. Title 21 is designatec 
for occupational licensing boards. 

The NCAC is available in two formats. 

(1) Single pages may be obtained at a minimurr 
cost of two dollars and 50 cents ($2.50) for U 
pages or less, plus fifteen cents ($0. 1 5) per eacf 
additional page. 

(2) The full publication consists of 52 volumes 
totaling in excess of 15,000 pages. It is sup 
plemented monthly with replacement pages 
one year subscription to the full publication in 
eluding supplements can be purchased fo 
seven hundred and fifty dollars ($750.00). In 
dividual volumes may also be purchased wit! 
supplement service. Renewal subscriptions foi 
supplements to the initial publication available 

Requests for pages of rules or volumes of the NCAC 
should be directed to the Office of Administratis 
Hearings. 

NOTE 

The foregoing is a generalized statement of the pro 
cedures to be followed. For specific statutory language 
it is suggested that Articles 2 and 5 of Chapter 150B o 
the General Statutes be examined carefully. 

CITATION TO THE NORTH CAROLINA 
REGISTER 

The North Carolina Register is cited by volume, issue 
page number and date. 1:1 NCR 101-201, April 1, 198 

refers to Volume 1, Issue 1, pages 101 through 201 o 
the North Carolina Register issued on April 1, 1986 



North Carolina Register. Published bi-monthly by 
the Office of Administrative Hearings, P.O. 
Drawer 1 1666. Raleigh, North Carolina 27604, pur- 
suant to Chapter 150B of the General Statutes. 
Subscriptions ninety-five dollars (S95.00) per year. 
North Carolina Administrative Code. Published 
in looseleaf notebooks with supplement service by 
the Office of Administrative Hearings, P.O. 
Drawer 1 1666. Raleigh, North Carolina 27604, pur- 
suant to Chapter 150B of the General Satutes. 
Subscriptions seven hundred and fifty dollars 
($750.00). Individual volumes available. 






NORTH 
CAROLINA 
REGISTER 



ISSUE CONTENTS 




OJJ'icc of Administrative Hearings 

P. O. Drawer 11666 

Raleigh, NC 27604 

(919) 733 - 2678 



Robert A. Melott, 
Director 

James R. Scarcella Sr., 

Deputy Director 
Molly Mason, 

Assistant Director 

Staff: 

Ruby Creech, 

Publications Coordinator 
Teresa Kilpatrick, 

Editorial Assistant 
Jean Shirley, 

Editorial Assistant 
Latarsha Roberts, 

Records Clerk 



FINAL DECISION LETTERS 

Voting Rights Act 185 



II. PROPOSED RULES 
Administration 

State Construction 187 

Commerce 

Milk Commission 190 

Human Resources 

Division of Aging 229 

Health Services 220 

Medical Assistance 237 

Independent Agencies 

Housing Finance 255 

Insurance 

Agent Services 238 

NRCD 

Coastal Management 254 

Environmental Management 241 



III. FINAL RULES 
Revenue 

Motor Fuels Tax 258 

Transportation 

Motor Vehicles 258 

IV. LIST OF RULES AFFECTED 

June 1, 1988 260 

V. CUMULATIVE LNDEX 265 



NORTH CAROLINA REGISTER 

Publication Deadlines and Schedules 

(March 1988 - March 1989) 



Issue 


Last Day 


I^ast Day 


Earliest 


+ 


Date 


for 


for 


Date for 


Earliest 




Filing 


Electronic 


Public 


Effective 






Filing 


Hearing & 
Adoption by 
Agency 


Date 


******** 


******** 


*+**+*** 


++*****+ 


*******i 


03/15/88 


02/24/88 


03/02/88 


04/14/88 


07/01/88 


04/04,88 


03/11/88 


03/18/88 


05/04/88 


08/01/88 


04/15/88 


03/25/88 


04/01/88 


05/15/88 


08/01/88 


05/02/88 


04/11/88 


04/18/88 


06/01/88 


09/01/88 


05/16/88 


04/27/88 


05/03/88 


06/15/88 


09/01/88 


06/01,88 


05/10/88 


05/17/88 


07/01/88 


10/01/88 


06/15/88 


05/26/88 


06/02/88 


07/15/88 


10/01/88 


07/01/88 


06/10/88 


06/17/88 


07/31/88 


11/01/88 


07/15/88 


06/24/88 


07/01/88 


08/14/88 


11/01/88 


08 01/88 


07/11/88 


07/18 88 


08/31/88 


12 Dl SS 


OS 15 88 


07 26 SS 


08/02/88 


09/14/88 


12/01/88 


09/01/88 


08/11/88 


08/18,88 


10/01/88 


01/01/89 


09/15/88 


08/26/88 


09/02/88 


10/15/88 


01/01/89 


10/03 88 


09/12/88 


09/19,88 


1 1/02/88 


02/01/89 


10/14,88 


09/26/88 


10 03 88 


11/13/88 


02/01/89 


11/01/88 


10/11/88 


10/18/88 


12/01/88 


03/01/89 


11 1 5 SS 


10/26/88 


11/02/88 


12/15/88 


03/01/89 


12 01 SS 


1 1/07/88 


11/15/88 


12/31/88 


04/01/89 


12/15/88 


11/23/88 


12/02/88 


01/14/89 


04/01/89 


01/02/89 


12/08/88 


12/15/88 


02/01/89 


05/01/89 


01/16/89 


12/27/88 


01/03/89 


02/15/89 


05/01/89 


02/01/89 


01/10/89 


01/17/89 


03/03/89 


06/01/89 


02/15/89 


01/26/89 


02/02/89 


03/17/89 


06/01/89 


03/01/89 


02/08/89 


02/15/89 


03/31/89 


07/01/89 


03/15/89 


02/21/89 


03/02 89 


04/14/89 


07/01/89 



* The "Earliest Effective Date" is computed assuming that the public hearing 
and adoption occur in the calendar month immediately following the "Issue 
Date", that the agency files the rule with The Administrative Rules Review 
Commission by the 20th of the same calendar month and that ARRC approves 
the rule at the next calendar month meeting. 



VOTING RIGHTS ACT FINAL DECISION LETTERS 



[G.S. I20-30.9H, effective July 16, 1986, requires that all letters and other documents issued by the 
A ttorney General of the United States in which a final decision is made concerning a "change af- 
fecting voting" under Section 5 of the Voting Rights Act of J 965 be published in the North Carolina 
Register. ] 



\VBR:SSC:TGL:jmc 
DJ 166-012-3 
T5490-5491 
T9424 



U.S. Department of Justice 
Civil Rights Division 



Voting Section 
P.O. Box 66128 
Washington, D.C. 20035-6128 



May 16, 1988 



Richard J. Rose, Esq. 

Poyner and Spruill 

P.O. Box 353 

Rocky Mount, North Carolina 

Dear Mr. Rose: 



27802-0353 



Phis refers to the two annexations (Ordinance Nos. 0-87-63 and 0-88-5) and the designation of the 
annexed areas to Wards 4 and 5 for the City of Rocky Mount in Edgecombe and Nash Counties, North 
Carolina, submitted to the Attorney General pursuant to Section 5 of the Voting Rights Act of 1965, 
as amended, 42 U.S.C. 1973c. We received your submission on March 15, 1988. 

The Attorney General does not interpose any objections to the changes in question. However, 
we feel a responsibility to point out that Section 5 of the Voting Rights Act expressly provides that the 
failure of the Attorney General to object does not bar any subsequent judicial action to enjoin the 
enforcement of such changes. See the Procedures for the Administration of Section 5 (28 C.F.R. 

51.41). 



Sincerely, 

Wm. Bradford Reynolds 
Assistant Attorney General 
Civil Rights Division 

By: 



Gerald W. Jones 
Chief, Voting Section 



NORTH CAROLINA REGISTER 



1S5 



VOTING RIGHTS ACT FINAL DECISION LETTERS 



U.S. Department of Justice 
Civil Rights Division 

\VBR:SSC:TGL:jrnc:dvs 

D.I 166-012-3 Voting Section 

T5933 P.O. Box 66128 

Washington, D.C. 20035-6128 

May 20, 1988 

David A. Holec, Esq. 

City Attorney 

P.O. Box 13S8 

I umberton. North Carolina 2S359 

Dear Mr. Holec: 

This refers to the procedures for conducting the May 31, 1988, special election for the City of 
I umberton in Robeson County, North Carolina, submitted to the Attorney General pursuant to Sec- 
tion 5 of the Voting Rights Act of 1965, as amended, 42 L'.S.C. 1973c. We received your submission 
on March 21, 19SS! 

The .Attorney General does not interpose any objection to the change in question. However, we 
feel a responsibility to point out that Section 5 of the Voting Rights Act expressly provides that the 
failure of the Attorney General to object does not bar any subsequent judicial action to enjoin the 
enforcement of such change. See the Procedures for the Administration of Section 5 (28 C.F.R. 51.41). 

Sincerely, 

Wm. Bradford Reynolds 
Assistant Attorney General 
Civil Rights Division 

By: 



Gerald W. Jones 
Chief, Voting Section 



IS6 NOR TH CA ROLINA REGIS TER 



PROPOSED RULES 



TITLE I - DEPARTMENT OF 
ADMINISTRATION 



No 



otice is hereby given in accordance with G.S. 
1 50B- 12 that the Department of Administration 
intends to adopt regulations cited as 1 NCA C 30E 

.0101 - .0402. 

1 he proposed effective date of this action is Oc- 
tober I, I9S8. 

1 he public hearing will be conducted at 9:00 a. 
m. on July 18, 1988 at Large Conference Room, 
State Construction Office, Legislathe Office 
Building, Room 403, 300 N. Salisbury Street, 
Raleigh, North Carolina. 

K^-ommenl Procedures: Any interested person 
may present his or her views and comments either 
in writing prior to or at the hearing or orally at the 
hearing. Any person may request information, 
permission to be heard or copies of the proposed 
regulations by writing or calling Becky Barbee, 
Department of Administration, 116 West Jones 
Street, Raleigh, North Carolina 27603-8003, 
(919) 733-7232. 



CHAPTER 30 - ADMINISTRATION' 
CONSTRUCTION 



STATE 



SUBCHAPTER 30E -STATE BUILDING 

COMMISSION DESIGNER EVALUATION 

PROCEDURES 

SECTION .0100 - GENERAL PROVISIONS 

.0101 AUTHORITY 

The State Building Commission, hereinafter re- 
ferred to as SBC, is a statutory body, empowered 
by Public Law to perform a multiplicity of duties 
with regard to the State's Capital Facilities de- 
velopment and management program. In the 
specific area of State capital improvement project 
designer evaluation, the SBC is empowered to 
develop procedures for accomplishment of such 
evaluation. 

Statutory Authority G.S. 143-/35.25; 143-135.26. 

.0102 POLICY 

It is the policy of the SBC to evaluate designers 
for capital improvement projects as defined in 
G.S. 143-135.27 based on criteria contained 
herein. Further, it is considered of paramount 
importance that every State capital improvement 
project receive a professional design which is 



timely, of highest professional quality, and in 
keeping with the project scope. It is to this end 
that individual designer performance on State 
capital improvement projects should be fairly and 
consistently evaluated and used as a factor in de- 
signer selection for future work. 

Statutory Authority G.S. 143-/35.25; 143-135.26. 

.0103 DEFINITIONS 

For purposes of this Subchapter, the following 
definitions shall apply: 

(1) "Capital Projects Coordinator" means the 
individual authorized by each funded agency 
to coordinate all capital improvement 
projects and related matters with the State 
Construction Office and to represent that 
agency on all matters presented to the SBC. 
The individual so designated for purposes 
of these rules may have other titles within 
the individual's agency but shall carry out 
the duties assigned herein to the Capital 
Projects Coordinator. Whenever the Capi- 
tal Projects Coordinator is referenced herein, 
it shall be understood to include a designated 
assistant or representative. Concerning 
evaluation of designers, the Capital Projects 
Coordinator is responsible for the agency's 
evaluation of each phase of the project as 
well as the overall designer evaluation. 

(2) "Project Designer" means any individual, 
firm, partnership, corporation, association 
or other legal entity permitted by law to 
practice architecture, engineering, landscape 
architecture or surveying in the State of 
North Carolina. The designer shall be re- 
sponsible for the performance of all his 
consultants. Accordingly, the evaluation of 
the project designer will include evaluation 
of the work of all consultants who are in- 
cluded in the designer's contract with the 
funded agency. 

(3) "Funded Agency" means the department, 
agency, authority or office that is named in 
the legislation appropriating funds for the 
design and/or construction project. 

(4) "Owner's Representative" is an individual 
appointed by the using agency to represent 
the using agency on all user-related matters. 
The owner is the representative of the using 
agency as defined in Rule .0103(9) of Sub- 
chapter 30D - State Building Commission 
Designer Selection Procedures. 

(5) "Professional Services" means those ser- 
vices within the scope of the practice of ar- 
chitecture, engineering, landscape 
architecture or surveying as defined by the 
public laws of North Carolina. 



NORTH CAROLINA REGISTER 



187 



PROPOSED RULES 



(6) "Scope Statement" means a written de- 
scription of the capital project that is to be 
designed. Normally the scope statement 
shall reflect the written project description 
as contained in the project cost estimate 
valida'ed by the State Construction Office. 

(7) "Evaluation Form" is the form to be used 
for all designer evaluations. The form shall 
be developed and approved by the State 
Building Commission and is the only ap- 
proved document for this purpose; it may 
be reproduced by the agencies as required. 

Statutory Authority G.S. 143-135.25; 143-135.26. 

SECTION .0200 - PROJECT INFORMATION 

.0201 PROJECT DESCRIPTION 

It shall be the responsibility of each Capital 
Projects Coordinator, for each Capital Improve- 
ments project as defined in G.S. 143-135.27 re- 
quiring professional services, to provide the State 
Construction Office with a written description of 
the professional services desired, the scope of 
work, schedule requirements, amount of author- 
ized funds and other appropriate information. 
Particular emphasis will be placed on a determi- 
nation as to whether the designer's services are 
to include items such as programming, modeling, 
special presentations or other requirements be- 
yond specific facility design. This requirement 
data shall be incorporated in the designer's pro- 
fessional services contract and will serve as key 
elements against which the designer performance 
will be evaluated. 

Statutory Authority G.S. 143-135.25: 143-135.26. 

.0202 DESIGN CONTRACT 

It ihall be the responsibility of the Office of 
State Construction to insure that both the Capi- 
tal Projects Coordinator and the designer have a 
clear mutual understanding of design require- 
ments for the project and key elements of these 
requirements are included in the professional 
services contract between the agency and the de- 
signer. 

Statutory Authority G.S. 143-135.25; 143-135.26. 

SECTION .0300 - EVALUATION OF 

DESIGNERS 

.0301 DESIGN PHASES 

Definitions: 

( 1 1 "Pre-Design Phase" is the description of the 
provision of professional services prior to 
actual design. If a firm scope of the work 
is not known, the design agreement mav be 



written in such a manner as to require 
project programming assistance by the de- 
signer, followed by agency approval of a 
designer-proposed project scope, prior to 
commencement of actual design. In evalu- 
ating design services during this phase, the 
Capital Projects Coordinator may wish to 
receive input from the Owner's represen- 
tative. 

(2) "Design Phase" involves preparation of the 
actual design. The Capital Projects Coor- 
dinator must maintain active involvement 
during the design process in order to be able 
to evaluate the designer's response to owner 
requirements, the consistency of owner re- 
quirements, external design requirements 
driven by insurance or environmental con- 
siderations, etc., the technical design itself, 
designer, owner response to review com- 
ments, adherence to design schedule, and 
quality of cost estimate, as well as adherence 
of the cost estimate to the project budget. 
In general, the evaluation of this phase is to 
encompass the efficiency and effectiveness 
of the designer in adherence to the project 
scope statement. Included is an evaluation 
of subconsultants if utilized. The subcon- 
sultant performance will also be considered 
in evaluation of the principal designer. The 
Capital Projects Coordinator, in preparing 
the evaluation of the design phase, may wish 
to receive input from the Owner's represen- 
tative as well as the State Construction Of- 
fice. 

(3) "Bidding-Construction Phase" encom- 
passes the process for provision of profes- 
sional services for bidding, award, and 
construction of the project. As the job 
progresses past contract award, the Capital 
Projects Coordinator must maintain a con- 
tinuing awareness of designer performance 
during the period of construction including 
the shop drawing review process, payment 
processing, change order management, and 
field administration including project cost 
control. The Capital Projects Coordinator 
or owner's representative should attend the 
monthly construction progress meetings. 
The Capital Projects Coordinator must be 
capable of discerning the degree to which 
change orders are precipitated by design er- 
rors or omissions. The Capital Projects 
Coordinator must be capable of determining 
how well the designer provides general ad- 
ministration of the performance of con- 
struction contracts, including inspection and 
continuous liaison of the work to insure 
compliance with plans and specifications 



188 



\ORTH CAROLINA REGISTER 



PROPOSED RULES 



during the construction process. At the 
completion of the project, the Capital 
Projects Coordinator must ensure that the 
project designer has completed all required 
close-out actions. The Capital Projects 
Coordinator will be responsible for prepara- 
tion of the Bidding- Construction Phase 
evaluation. Assistance will be sought from 
the Owner's representative and the State 
Construction Office in preparation of the 
evaluation for this phase of the project. 

Statutory Authority G.S. 143-135.25; 143-135.26. 

.0.102 OVERALL JOB PERFORMANCE 

The Capital Projects Coordinator shall deter- 
mine the designer's overall performance for the 
completed project. The overall rating is intended 
to reflect the effectiveness of the design in 
achieving the predetermined project scope in a 
timely, cost effective manner. The evaluation 
shall encompass the designer's management ap- 
proach to the project including cooperation of 
the designer's staff, communication with the 
Capital Projects Coordinator and Owner's repre- 
sentative, timeliness of action, and performance 
of consultants. The Capital Projects Coordina- 
tor may invite input from the Owner's represen- 
tative and the State Construction Office. All 
prime contractors will be offered the opportunity 
to provide an assessment of the designer at job 
completion. The Capital Projects Coordinator 
shall be responsible for the final overall rating. 
This summary evaluation shall not necessarily 
reflect a precise numerical averaging of scores for 
the Pre-design, Design, and Bidding- 
Construction phases but will be generally repre- 
sentative of those scores. To be timely and 
useful, designer evaluation data will be accumu- 
lated within 30 days of submission of the final 
report. Prior to completion of the final designer 
evaluation, the Capital Projects Coordinator 
shall submit the proposed evaluation to the de- 
signer for comment. Comments received from 
designers may be considered by the Capital 
Projects Coordinator. At this stage, the Capital 
Projects Coordinator shall prepare the final de- 
signer evaluation and provide a copy to the de- 
signer. The form approved by the SBC shall be 
used for this purpose. 

Statutory Authority G.S. 143-/35.25; 143-135.26. 

.0303 POST OCCUPANCY EVALUATION 

The designer evaluation process allows for a 
second evaluation to be conducted within 36 
months of the completion of a capital project if 
design-related latent defects are discovered. A 



separate procedure of the State Building Com- 
mission may require a formal post-occupancy 
evaluation within 12 months of a building com- 
pletion. The data from the 12 month post- 
occupancy evaluation can be used as a substitute 
for the follow-up designer evaluation if the Cap- 
ital Projects Coordinator so determines. 

Statutory Authority G.S. 143-135.25; 143-135.26. 

.0304 INTERIM DESIGNER EVALUATION 

The designer may request preparation of an in- 
terim evaluation form by the Capital Projects 
Coordinator or the Coordinator may elect to 
prepare an interim evaluation if so desired. This 
interim evaluation is intended to reflect perform- 
ance to date and should be used as a guidance 
device for correction of performance prior to the 
final evaluation. 

Statutory Authority G.S. 143-135.25; 143-135.26. 

.0305 SUBMISSION OF FINAL REPORT 

The Capital Projects Coordinator shall submit 
the completed final evaluation to the Office of 
State Construction with a copy to the designer. 
The designer shall have the opportunity to com- 
ment on the evaluation to the Office of State 
Construction with a copy to the Capital Projects 
Coordinator. Such comments on the final eval- 
uation shall become a part of the final evaluation 
record. It is imperative that the final designer 
evaluation be completed and presented to the 
State Construction Office for all capital projects 
within 60 days of the final report. If the evalu- 
ation is not completed within the prescribed time 
frame, the State Building Commission may elect 
to process no further design awards for an agency 
until the evaluation is complete. 

Statutory Authority G.S. 143-135.25; 143-135.26. 

.0306 REPORT COMPILATION 

The Office of State Construction will be re- 
sponsible for maintaining designer evaluation 
data. The data maintained shall be on an indi- 
vidual job basis and also cumulative by the de- 
signer. Data will be made available on request 
to individual designer preselection committees. 
The data maintained by the State Construction 
Office will reflect performance history for a pe- 
riod of five years. All evaluation data on com- 
pleted projects in excess of five years of age will 
be removed from State Construction Office files 
and will not be used as a factor in the cumulative 
evaluation. 

Statutory Authority G.S. 143-135.25; 143-135.26. 



NORTH CAROLINA REGISTER 



189 



PROPOSED RULES 



SECTION .0400 - POST-EVALUATION 
PROCEDURES 

.040! AWARDS PROGRAM 

Capital Projects Coordinators who consider 
that designer performance on a completed Capi- 
tal Improvement Project merits special recogni- 
tion may nominate the designer for a certificate 
of Design Merit. Nominations will be made by 
the Capital Projects Coordinator to the Office of 
State Construction who will screen the nominees 
and will in turn make appropriate recommen- 
dations to the State Building Commission. The 
State Construction Office may also initiate award 
recommendations. The SBC will consider all 
nominations and make final approval of all 
awards. The State Building Commission shall 
arrange for presentation of the certificates at a 
suitable ceremony during a time and place of its 
own choosing: however, these presentations will 
normally be made during the annual State Con- 
struction Conference. The State Construction 
Office shall provide staff support to the State 
Building Commission for this program. 

Statutory Authority G.S. 143-135.25; J 43-/ 35. 26. 

.0402 APPEALS OF ASSIGNED EVALUATIONS 

If a design firm considers that the assigned 
evaluation is improper and the opportunity to 
provide rebuttal comments for the record is in- 
sufficient to resolve the assigned rating, the de- 
signer may appeal the rating to the Office of State 
Construction. The State Construction Office 
will appoint and convene a rating panel of three 
professional State employees of which at least 
one member is a licensed professional architect 
or engineer to hear the appeal and render a deci- 
sion. The hearing shall involve at a minimum 
the Capital Projects Coordinator and the Own- 
er s representative as well as representatives of the 
designer and is open to the public. The State 
Construction Office hearing panel shall issue a 
report to the State Building Commission of the 
hearing and the decision reached. If the Capital 
Projects Coordinator or designer desires further 
recourse, the State Construction Office panel de- 
cision may be appealed directly to the State 
Building Commission, which will render a deci- 
sion. A formal appeal may be made to the Office 
of Administrative Hearings pursuant to N.C.G.S. 
150B. 

Statutory Authority G.S. 143-135.25; 143- 1 35.26. 

TITLE 4 - DEPARTMENT OF COMMERCE 



No 



otice is hereby given in accordance with G.S. 
150B-12 that the Sorth Carolina Milk Commis- 
sion intends to renumber regulations cited as 4 
SCAC 7 .0508 as .0513. .0506 as .0514, .0509 as 
.0515, .0510 as .0516, .0511 as .0517, .0512 as 
.0518. .0513 as .0519, .0514 as .0520; amend 
.0501, .0503, .0504; Repeal .0505; amend .0507; 
adopt new rule .0506, .0508, .0509, .0510, .0511. 
.0512; amend .0513, .0514, .0515, .0516 and 
.05/7. 

1 he proposed effective date of this action is No- 
vember I. 1988. 



Th 



he public hearing will be conducted at 10:00 
a.m. on July 26, 1988 at Jane S. McKimmon 
Center, Sorth Carolina State University, ( Corner 
Western Bhd. and Gorman Streets). Raleigh. 
Sorth Carolina. 



Co 



ommenl Procedures: Data, opinions and ar- 
guments concerning these amendments, adoptions 
and repeals must be submitted by July 26, 1988, 
to the Sorth Carolina Milk Commission, 430 S. 
Salisbury Street, Raleigh, SC 2761 1, Attention 
Grady Cooper, Jr., Executive Secretary. 

CHAPTER 7 - MILK COMMISSION 
SECTION .0500 - MARKETING REGULATIONS 

.0501 DEFINITIONS 

h+»f th* purpose e4 th* marketing regulation: . , 
th* following terms ef words c . hull moan: 

(-k4 "Act" fiftea-BS .Vrticle S*44r Chapter 4446 ef 
th* G e neral Statute ' ; , ei North Carolina, f*- 
lating k+ th* North Carolina Milk Commie 
sion. 

(-34 "Marketing urea" means th* af*a designated 
b*r th* commission, including all th* tern 
twy- within th* counties designated fof th* 

f^ "Classification" means th* classify ing &f 
milk afhi fluid milk products t»t»- classes ae- 
cording h* utilization fof a designated dcliv 
*py period. 

(-44 "Delivery period" means th* calendar 
month *f approved accounting period. 

f4>+ "Breed milk" means milk produced bv a 
herd t+f registered cattle and or grad e cattl e 
»f a specified nationally recognized breed, 
which f? labeled, advertised mti sold by a 
distributor a* breed milk fof a premium 
price ef fH*t l**r than t*«* e*»t ( SO. 01 ) p*f 
quart. 

(-64 "Bas e " fof a produc e r m e ans th* average 
deliveries ef a producer fof a designated p*- 



190 



SORTH CAROLINA REGISTER 



PROPOSED RULES 



fm+4 that is established »«■ a» equitable basis 
w4tfr a4 other producers, fof allocating 
classes t4 milk. 
(3) 44*e following tonns as defined m Articlo 
3&&_ Chapter 106 266.6 ef the General 
Stututoo ef North Carolina shall apply: 
"affiliate, " "booko a«4 records," "commio 
sion," "distributor," "health authorities," 
"liconseo," "markot," "milk," "peroon," 
"producer," "sanitary'," "oubdiGtributor," 
subsidiary. 



(&) "Millc." ^e» the purposu ef- classification, 
wherever the word "milk" is used, it- shall 
be construed to- include all whol e milk, 
cream, chocolate milk, plain buttermi lk-7 
creamed buttermilk, skim milk, special e* 
premium milk, flavored milk e* drinks, 
concentrated milk, st e ril e milk , dietary 

HHHtlll I.HJ 1 1 1 1 1 K , 1 1 1 1 i K *m Jit Ivt* II 11 h. , tttitt itfrli (twi r? 

eggnog *m4 other milk cream mixtures, re- 
gardless ef grad e #f fat content and: 
(a) "lowfat Fresh Whit e Milk." lowfat fresh- 
white milk is fresh milk from which a 
sufficient portion »f milkfat has been fe- 

»-»-!■ \ t : . t . 1 t . \ r i.li ■ . .. » it..- «> < i I 1 lit i-i-miiHl) t ■ -» Ujji 

rTTT T TTTT ITT I IT11ILL 1 [TO I I1I1I11UL tTTnTCTTT ITT 1 H_H 

1 . i .- . - th-m I I S ( I QflgQ/mJ 'n''i n ■ ^ * «~»~t , t »-, i thin 

I \J - ra U1U1I OTTTT rnTTTrt CTTTTJ nnT 1 1 1 T 7 1 *- TTTTTTT 

44) percent . 

(+4 "I.owfat White Reconstituted e* Recom 
bined Milk." 1 owfat white reconstituted 
&f recombined milk shall mean milk 
which is a result of the mixing ef milk 
solids aftd water with awy- efr &f oombi 
nation af-r fresh whole milk , fresh skim 
milk, milkfat, which results m a product 
containing fh*4- less than Qr4t) percent a**4 
»et more than 44) percent milkfat. 

(©7 "L owfat Flavored fresh Milk." Lowfat 
flavored fresh milk is fresh milk from 
which a sufficient portion ef milkfat has 
been removed te reduc e its milkfat con 

I I ^ti 1 1 1 ,l f\4 \t 1 1 *ifi' t rl ' I T"! ( f S ( ) Til *il'r "i Ml t 'i Hi 1 i 1 1 1 1 

more than 44) percent a«4 to- which has 
been added a flavor ef sweetener. 
(4} "I owfat flavored Reconstituted ef Re- 
combin e d Milk." 1 owfat flavored recon 
stituted ef recombined milk shall moan 
milk which is a result ef the mixing ef 
milk solids aw4 water te which has been 
add e d a flavor ef sweetener with any- efr 
ef combination efr fresh whole milk, fresh 
■ jldm milk, milkfat, which results » a fla- 
vored ef sweetened product containing 

n/it 1 - t . .' t n 'in II Ml r\nfiMn< 'in.l rmt [fiA£a 
rTTTT 1 V- -TJ TTTTXTT TTTTTTT I "VI IVI T l CTTTTT rTTTT TTTTTTTJ 

than 34) percent milkfat. 
(e} "Ultra lligli Temperature Milk." Ultra 
high temperature milk is milk which is 
as e ptically processed aft4 hermetically 
sealed m a container s» as t» render the 



$ 



product free ef microorganisms capable 
ef reproducing » the product under 
normal non refrigerated conditions ef 
storage an4 distribution. Reference te- 
this product wiH- be UIIT milk. 

"Ultra Past e urised Milk." 44tfa 



pastourii'.od milk is H%4k which has been 
thermally processed at ef above 4&Q 4e- 
greeo 14 (44* degrees (44 fef a* k^ast ^"^^ 
seconds s» as t» produco a product which 
has a» oxtondod sholf We under refriger 
ate4 conditions. 
For the purpose of the marketing regulations, 
the following terms or words shall mean: 

(1) "Act" means Article 28B, Chapter 106 of 
the General Statutes of North Carolina, re- 
lating to the North Carolina Milk Commis- 
sion. 

(2) "North Carolina Marketing Area." The 
"North Carolina marketing area", herein- 



after called the marketing 



S 



the 

territory within the boundaries of the state 
of North Carolina including all waterfront 
facilities connected therewith and all terri- 
tory occupied by government (municipal, 
state, or federal) reservations, installations, 
institutions, or other similar establishments. 

(3) "Classification" means the classifying of 
milk and fluid milk products into classes ac- 
cording to utilization for a calendar month. 

(4) "Delivery period" means the calendar 
month. 



(5) "Base" for a producer means the average 
deliveries of a producer for a designated pe- 
riod that is established on an equitable basis 
with all other producers, for allocating 
classes of milk. 

(6) The following terms as defined in Article 
28B, Chapter 106-266.6 of the General 
■Statutes of North Carolina shall apply: 
"affiliate", "books and records", "commis- 



sion^ "distributor", "health authorities", 
"licensee", "market", "milk", "person", 



"producer", "sanitary", 
"subsidiary". 



"subdistributor' 



(7) "Milk." For the purpose of classification, 
wherever the word "milk" is used, it shall 
be construed to include all whole milk, 
lowfat milk, cream, chocolate or flavored 
milk, chocolate or flavored lowfat milk, 
plain buttermilk, creamed buttermilk, skim 
milk, special or premium milk, flavored milk 
or drinks, concentrated milk, sterile milk, 



any recombined milk, filled milk (milk por- 
tion), dietary modified milk, milk shake mix, 
half and half, eggnog and other milk-cream 
mixtures, regardless of grade or fat content. 



NORTH CAROLINA REGISTER 



191 



PROPOSED RULES 



(8) 'Tilled Milk" Filled milk means any 
combination of nonmilk fat (or oil) with 
skim milk (whether fresh, cultured, recon- 
stituted, or modified hv the addition of 
nonfat milk solids), with or without milkfat, 
so that the product (including stabilizers, 
emulsifiers, or flavoring) resembles milk or 
anv other fluid milk product, and contains 
less than six percent nonmilk fat (or oil). 

(9) "Ultra I huh Temperature Milk." Ultra 
high temperature milk is milk which is 
asepticallv processed and hermetically sealed 
in a container so as to render the product 
free o{ microorganisms capable of reproduc- 
ing in the product under normal nonrefng- 
erated conditions of storage and distribution. 
Reference to this product will be I HI' milk. 

(10) ' T ltra Pasteurized Milk." lltra 

pasteun/ed milk is milk which has been 
thermally processed a[ or above 280 degrees 
!■'. ( 13S degrees C.) for at least two seconds 
so as to produce a product which has an 
extended shelf life under refrigerated condi- 
tions. 



(11) "Route disposition" means a delivery to 
a retail or wholesale outlet (except to a 
plant) either direct or through any distrib- 
ution facility (including disposition from a 
plant store, vendor or vending machine) of 
a fluid milk product classifie d as Class I 
milk. 

( 12) "Cooperative association" means any co- 
operative association of producers which the 
Milk Commission determines, after applica- 
tion by the association: 



(a) To be qualified under the provisions of the 
Act of Congress of February IS, 1922, as 
amended, known as the "Capper- Volstead 
Act"; and, 

(h) To have and to be exercising full authority 
in the sale of milk of its members. 



1121 



'Marketing agent' 



means a business en- 
tity, licensed under the provisions of Rule 
.0503(g)(9) or a cooperative association act- 
ing on behalf of nonmembers, that enters 
into a contractual agreement with Grade A 
producers to market the raw milk of such 
producers. A marketing agent may, subject 
\o_ ]\u_ tarm-- ot t_hc contract, collect the 
amounts due p roducer^ trom the vile of their 
milk to North Carolina pool plants, and 
make such deductions from producers as are 
authorized bv these rules. 
( 1 4) "F'lant" means the land, buildings, facili- 
ties, and equipment constituting a single 
operating unit or establishment at which 
milk or milk products (including tilled milk) 
are received, processed, or packaged . Sepa- 



rate facilities without stationary storage 
tanks which are used only as a reload point 
for transferring bulk milk from one tank 
truck to another or separate facilities used 
only as a distribution point for storing 
packaged fluid milk products in transit for 
route disposition shall not be a plant under 
this definition. 

( 15) "Regulated Plant" means a fluid milk 
plant located in North Carolina operated bv 
a handler that is approved by a duly consti- 
tuted health regulator. - agency for the proc- 
essing or packaging of Grade A milk. 

( 16) "Pool Plant" or "Pool Cooperative" ex- 
cept as provided in ( 16)(b) of this Rule, 
means: 

(a) Any regulated plant or cooperative asso- 
ciation that is operated as a licensed han- 
dler in North Carolina. 

(b) The term "pool plant" shall not mean anv 
of the following plants: 

(i) A producer-handler plant: 
(ii) a governmental agency plant: 
(ui) A plant located outside the State of 

North Carolina; or, 
(iv) A marketing agent which is not a co- 
operative association, as defined in ( 13) 
of this Rule and licensed under Rule 
.0503(g)(9), 

( 17) "Regulated and Unregulated Nonpool 
Plants and Handlers" shall be defined as 
follows: 



(a) "Regulated Nonpool Plant and Handler" 
means anv milk or tilled milk receiving or 
processing plant that is licensed to dis- 
tribute milk in North Carolina, but is ex- 
empt from the pooling provisions of these 
Rules. The following categories of regu- 
lated nonpool plants are further defined 
as follows: 

(i) "Out of state distributor" means a li^ 
censed distributor whose plant is located 
outside North Carolina; 
(ii) A "producer-handler" as defined in 

Paragraph (19) of this Rule; 
(iii) A "marketing agent" as defined in Rule 



.0503(g)(9) 
Rule; and 



and Paragraph (13) of this 



(iv) A "governmental agency plant" means 
a plant operated bv a governmental 



agency from which fluid milk products are 
distributed in the marketing area, 
(b) "Unregulated Nonpool Plant and 

or 



Nonpool Plant 
anv milk receiving 



Handle" means 
processing plant not required to be li- 
censed to distribute milk in North 
Carolina and which is engaged solely in 
the manufacture of non-grade A products. 



192 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



Q8} 
Oil 



(bi 

(c) 



"Handler" means: 



a distributor or subdistributor as defined 
m Article 28B. Chapter 106-266.6(4) of 
the General Statutes of North Carolina; 
a person who operates one or more regu- 
lated or unregulated plants; 
a cooperative association which markets 
the milk of its member producers for the 
account of the association pursuant to 



Paragraphs (21) 
Rule; 



(22) and (23) of this 



(d) a producer-handler. 
( 19) "Producer-handler" means any person: 

(a) who operates a dairy farm and a processing 
plant from which there is route disposi- 
tion in the marketing area; 

(b) who receives no fluid milk products from 
sources other than his own farm pro- 



(d) who 



duction and pool plants; 
(c) whose receipts of fluid milk products from 
pool plants does not exceed a daily aver- 
age of 1,501) pounds during the month; 
who disposes of no other source milk as 
Class I milk except by increasing the 
nonfat milk solids content of the fluid 
milk products received from his own farm 
production or pool plants; 
(e) who provides proof satisfactory to the 
Milk Commission that the care and man- 
agement of the dairv farm and other re- 
sources necessary for his own farm 
production of milk and the management 
and operation of the processing plant are 
the personal enterprise and risk of such 
person. 
(20) "Constructively Received" is defined as 
occurring when North Carolina baseholder 
milk which bv contractual obligation would 
ordinarily be received by one handler, but 
which bv mutual agreement of th£ parties, 
in order to result in a savings of hauling or 
other charges is not physically received bv 
such handler, but is diverted directly to and 
actually received by another handler which 
is a party to said agreement. Under this 
definition, the milk thus shipped would be 
deemed to be constructively received bv the 
first handler although physically received by 
the second handler. 



[21} 



'Baseholding Producer 



S 



bxcept as provided in (bi of this Para- 
graph, "baseholding producer" means a 
producer who holds a North Carolina 
Milk Commission base that has been es- 
tablished or acquired in accordance with 
Rule .0516 and who produces milk ap- 
proved by a duly constituted regulatory 



agency for fluid consumption, whose milk 
is: 

(i) received at a pool plant directly from 
such person; 
(ii) received by a handler described in Par- 
agraph (18) of this Rule; or 
(iii) diverted from a pool plant in accord- 
ance with Paragraph (22) of this Rule, 
(b) "Baseholding Producer" shall not include: 
(i) a producer-handler as described in 
Paragraph (19) of this Rule; 
(ii) a governmental agency operating a 
plant exempt pursuant to Paragraph 
(17)(a')(iv) of this Rule; or 
(iii) a North Carolina producer whose milk 
is delivered to an unregulated handler or 
whose milk qualifies for pooling in an- 
other pool, provided however, this pro- 
vision does not eliminate from the North 
Carolina pool the volume of baseholding 
milk for a North Carolina plant which is 
regulated by a federal or another state or- 
der. 
(22) "Qualifying Baseholding Producer Milk" 
means the skim milk and butterfat contained 
in milk of North Carolina baseholding pro- 
ducers eligible to participate in the North 
Carolina pool that i^ 

(a) received at a pool plant directly from such 
producer bv the operator of th£ plant: 

(b) received by a regulated handler described 
in Paragraph (18) of this Rule; 

(c) diverted from a pool plant for the account 
of the handler operating such plant to an- 
other pool plant; 

(d) diverted from a pool plant to a nonpool 
plant for the account of the handler de- 
scribed in Paragraph (18) of this Rule, 
subject to the following conditions: 

(i) a baseholding producer's milk shall be 
eligible for diversion to a nonpool plant 
during any month in which such producer 
milk is physically or constructively re- 
ceived at a pool plant as follows: 

(A) in any month of August through 
February, six days' production; and 

(B) in any month of March through July, 
two days' production. 

(ii) During each of the months of August 
through November and January' and 
February', the total quantity of milk di- 
verted by a cooperative association shall 
not exceed one-fourth of th£ baseholding 
producer milk that such cooperative 
caused that month to be delivered to or 
diverted from pool plants; or 
(iii) a handler described in Paragraph (18) 
of this Rule that is not a cooperative as- 



NORTH CAROLINA REGISTER 



193 



PROPOSED RULES 



sociation may divert for its account any 
baseholding producer milk that is not un- 
der the control of a cooperative associ- 
ation. The total quantity of milk so 
diverted shall not exceed one-fourth of the 
milk that is physically or constructively 
received at or diverted from pool plants 
as producer milk of such handler in each 
month of August through November and 
January and February. 



(e) Described in (a) through (d) of Paragraph 
(22) which is disposed of by pool plants 
or pool cooperatives, subject to the fol- 
lowing conditions: 
(i) That not less than 70 percent of the 
total quantity of baseholding producer 
milk is disposed of or sold as Class I milk 
in the months of September through No- 
vember and January. 

fn) That not less than 51) percent of the 

total quantity of baseholding producer 

milk is disposed of or sold as Class 1 milk 

in each of the other months. 

(23) 'Non-Qualifying baseholding producer 

milk" means the skim milk and butterfat 



contained in the mi 



Ik 



North Carolina 
baseholding producers that is not eligible to 
participate in the North Carolina pool for 
the tollowing reasons: 
(a) Any volume of milk that foes not meet 
the following requirements: 
(i) in any month that the total quantity of 
base holding producer milk disposed of in 
Class 1_ bv a pool plant or pool cooper- 
ative is less than 70 percent in the months 
of September through November, and 
January, and less than 50 percent in each 
of the other months. The volume of 
nonqualifying base holding producer milk 
shall be determined in accordance with (ii) 
of this Paragraph. The volume of base 
holder producer milk to which the per- 
centage is applicable is the volume phys- 
ically or constructively received at such 
plant or diverted from such plant under 
the provisions of Paragrap h (22) of this 
Rule, 
(ii) In anv month, when the Class I sales for 
a pool plant or pool cooperative com- 
pared to the volume of base holding pro- 
ducer milk defined above does not meet 
the 70 percent and 50 percent criteria, the 
handler shall disqualify a volume of milk 
and base in order to qualify the remaining 
milk received at this pool bv such handler. 
When the Class I utilization of a plant or 
a handler group is 1 is than T) percent or 



50 percent for the respective months, then 
the volume of Class I is divided by the 
applicable percentage to determine the 
volume of milk which will remain in the 
pool. To determine the amount of base 
which may remain m the pool computa- 
tions, make such adjustment in base as 
required by the procedure as outlined in 
Rule .0512(a). 

(b) Any milk diverted in excess of the limits 
prescribed in Paragraph (22)(d)(ii) or (iii) 
of thus Rule shall be nonqualifying 
baseholding producer milk. J he diverting 
handler shall designate the volume of de- 
liveries that shall be nonqualifying 
baseholding producer milk. If the handler 
fails <o make such designation, then the 
commission shall make such designation 
using the procedure outlined in Rule 
.0512(a). 

(c) Any milk produced bv a baseholding pro- 
ducer that qualifies for pooling in another 
pool shall not be included in the North 
Carolina pool, provided however, this 
provision does not eliminate from the 
North Carolina pool the volume of milk 
for a North Carolina plant which is regu- 
lated bv a federal or another state order. 

(24) "Other source milk'' means all skim milk 
and butterfat contained m or represented by: 
(a) receipts by a regulated plant, as defined in 
Paragraph ( 15) of this Rule, of packaged 
fluid milk products and bulk raw milk 
specified in Rule .1)504, from anv source 
other than baseholding producers or other 
pool plants, described in Paragraph ( 16) 



of this Rule; 



(b) 



<±1 



products (other than fluid milk products, 
products specified in Rule .0504, and 
products produced at the plant during the 
same month) from anv source which are 
reprocessed, converted into, or combined 
with another product in the plant during 
the month; and 

receipts of any milk products (other than 
a fluid milk product or a product specified 
in Rule .0504) for which the handler fails 
to establish disposition. 



Statutory Authority G.S. 1 06-266. 6; 

106-266.8(3) (7). 

.0503 DISTRIBUTOR LICENSES 

(a) No distributor, subdistributor or any other 
person shall sell or offer for sale or otherwise 
distribute milk in any county located in any 
marketing area until a license has been obtained 
from the Milk Commission. 



194 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



(b) The principal distributor or processing 
plant shall be charged with the responsibility of 
obtaining a license for his plant and his subdis- 
tributor before beginning distribution of milk in 
any county of a controlled area. 

(c) A new applicant for a distributor or sub- 
distributor license shall make application and re- 
ceive a license before handling, distributing, or 
offering for sale milk and/or milk products in 
fluid form for fluid consumption or use in any 
county of any marketing area. 

(d) The commission may decline to grant a li- 
cense to a new applicant or a Hew existing 4is- 
tributor to extend the territory of a licensed 
distributor or may suspend or revoke a license 
already granted, upon due notice to the licensee 
or applicant and after a hearing in accordance 
with the authority granted the commission by 
Article 28B, Chapter 106, of the General Stat- 
utes. 

(e) The Milk Commission shall give at least 10 
days notice to the licensee or applicant and state 
the reason for the hearing before refusing to grant 
a license or suspending or revoking a license al- 
ready granted. 

(f) The following procedure will be used by the 
commission when considering a request from a 
new applicant or for additional territory from an 
existing distributor: 

(1) At least 10 days prior to consideration of 
an application for license by the commis- 
sion, all distributors licensed to distribute 
milk in the county or marketing area shall 
be notified of the application and given 
an opportunity to file a statement regard- 
ing the application. 

(2) The applicant or his representative shall 
be given an opportunity to file statements 
or appear before the commission in sup- 
port of his application. 

(3) On the basis of information presented to 
the commission by licensed distributors, 
by the applicant or by the commission 
staff, the commission may approve the li- 
cense or may postpone action on the ap- 
plication pending a hearing. At this 
hearing, interested parties shall be given 
an opportunity to show cause why the li- 
cense should not be granted. 

(4) Licenses approved by the commission 
shall be issued to become effective on a 
date set by the commission; however, the 
effective date shall be at least 10 days fol- 
lowing the date of final approval. 

(g) Licenses issued by the commission shall be 
classified as follows: 

(1) General Distributor. A person or firm 
engaged in receiving, pasteurizing, proc- 



essing, and packaging raw milk into fluid 
form for distribution to the retail and 
wholesale trade and who may purchase 
part of its products packaged under their 
own label from another genera] distributor 
shall be licensed as a general distributor 
and must hold a license for each county 
or specified territory in which distribution 
is to be made or any areas or territory in 
which a subdistributor will distribute their 
products. 

(2) Restricted General Distributor. A person 
or firm engaged in receiving, pasteurizing, 
processing, and packaging raw milk into 
fluid form for distribution only to com- 
pany owned or affiliated stores, and who 
may purchase part of its products pack- 
aged under their own label from a general 
distributor, shall be licensed as a restricted 
general distributor and must hold a license 
for each county or specified territory in 
which distribution is to be made. 

(3) Non-processing General Distributor. A 
person or firm whose principal business 
is the distribution, to the retail and 
wholesale trade, milk which is processed 
by a general distributor under the label of 
the non-processing general distributor. 

(4) Subdistributor. A person or firm whose 
principal business is selling on retail and 
wholesale routes milk which is received, 
pasteurized, processed, and packaged by a 
licensed general distributor; or a person 
or firm who holds a general distributor's 
license and also distributes fluid milk pro- 
ducts which are processed by another 
general distributor, as a second brand, 
shall be licensed as a subdistributor for the 
county or territory in which distribution 
of the products of the general distributor 
will be made. 

(5) Limited Subdistributor. A person or firm 
who has an agreement or arrangement to 
purchase from a specified general distrib- 
utor either at such general distributor's 
platform, or on the basis of a drop ship- 
ment to a central location or warehouse, 
fluid milk products for distribution to its 
company owned or affiliated outlets shall 
be licensed as a limited subdistributor for 
each county or territory in which distrib- 
ution is to be made; provided, however, 
the genera] distributor is not required to 
hold a general distributor's license for 
such county or territory. The commission 
may consider the issuance of more than 
one limited subdistributor license for the 



NORTH CAROLINA REGISTER 



195 



PROPOSED RULES 



same general distributor in a given terri- 
tory. 

(6) Processor-Distributor of UHT Milk. A 
person or firm engaged in the processing 
of ultra high temperature milk as defined 
in Rule .0501 (8)(o) (9) of this Section for 
sale to other milk distnbutors, whole- 
salers, brokers, or retail outlets for dis- 
tribution to consumers. A milk 
distributor, wholesaler, broker, or retail 
outlet shall not be required to obtain a li- 
cense to distribute this product when this 
product is purchased from a processor li- 
censed under the provisions of this Sub- 
section. a«4 who eaft substantiat e the 
volume? sf the product sold » North 
Carolina wt4 that such volume ha* boon 
classified a«4 pa*4 a* the North Carolina 
Class J pric e a* required hy- R.ulo .0507(h) 
»f this Section. A milk distributor, 
wholesaler, broker, or retail outlet pur- 
chasing the product for redistribution may 
be required to file a report with the com- 
mission and the processor-distributor 
from whom the purchases are made when 
it is necessary" in order to identify the vol- 
ume sold in North Carolina. 

(7) Processor-Distributor of Ultra Pasteurized 
Milk. A person or firm engaged in the 
processing of ultra pasteurized milk, as 
defined m Rule .0501 t£++£* Q0| of this 
Section, for sale to other milk distributors, 
wholesalers, brokers, or retail outlets for 
distribution to consumers. A milk dis- 
tributor, wholesaler, broker, or retail out- 
let shall not be required to obtain a license 
to distribute this product when this prod- 
uct is purchased from a processor licensed 
under the provisions of this Subsection. 
a«4 who trtft substantiate the volume e£ 
the product **44 » North Carolina a&4 
that- such volume ha* been classified aft4 
pani at the North Carolina Class 1- pac e 
a* required hy- Rule .0507(h) ef thi* See- 
tion. A milk distributor, wholesaler, bro- 
ker, or retail outlet purchasing the product 
for redistribution may be required to file 
a report with the commission and the 
processor-distributor from whom the 
purchases are made when it is necessary 
in order to identify the volume sold in 
North Carolina. 

(S) Cooperative Marketing Association. A 
business entity engaged in the marketing 
of its owner-members' raw milk to other 
licensed North Carolina distributors. 



(9) Marketing Agent. A business entity, 
which is not a cooperative association, 
that enters mto a contractual agreement 
with North Carolina base holding pro- 
ducers to market the milk of such pro- 
ducers to other licensed North Carolina 
distributors. 
fh-^ Licenses issued te distributors located m 
other states shall he issued subject te- th e ir agree 
iftg t» follow the policies »f the commission 
which are applicable te- distributors located » 
North Carolina. 

Statutory Authority G.S. 106-266.8(7 )( 1 1); 
106-266.9; 106-266.10. 

.0504 CLASSIFICATION OF MILK 

(a) Class I. Class I shall include the product 
weight of all fluid milk, fluid milk products, (in- 
cluding products sweetened or flavored), all skim 
milk and butterfat which is sold or disposed of 
for consumption or use as processed fluid milk 
products under any trade name (regardless of 
grade), except milk shake mix, heavy cream, me- 
dium cream, half and half, one-half ounce coffee 
creamers, eggnog. and any other cream items 
which are classified in a lower class and military" 
sales approved for Class IA. The following pro- 
visions are also applicable to Class I: 

( 1) Class I includes, but is not limited to. the 
following type milk products; pasteurized 
milk, homogenized milk, lowfat milk, raw 
milk, whole lactic milk, buttermilk, plain 
and flake buttermilk, lov i fat flavored fresh 
milk, lov i fat flavored reconstituted ef ?e- 
combined milk, lowfat white reconstituted 
t+f recombined milk, skim milk, fortified 
skim milk with added solids, chocolate or 
flavored milks or milk drinks, dietary 
modified milk, sterile milk, filled milk 
(milk portion onlv), reconstituted milk, 
a«4 concentrated milk. UHT milk and 
ultra pasteurized milk. 

(2) Class I shall also include any volume of 
fluid milk loss or shrinkage in excess of 
three percent of each month's reconcil- 
iation as computed in accordance with 
feO* .0506(e) Rule .0508 of this Section. 
Any excessive loss computed which is to 
be paid as Class I to producers shall be 
paid in the producer payroll the pool 
computation for the month following the 
month in which such loss occurred. 

(3) .All fluid milk sold to military installations 
shall be classified as Class I except for 
such classification and class prices for 
specified periods as may be approved by 
the Milk Commission. 



196 



\OR TH CA R OLINA R EG IS TER 



PROPOSED RULES 



(4} Class J- shall ake includ e UIIT milk a«4 at the end of a month is later utilized in a higher 



ultra pasteuriz e d H*tlk- as defined » R.ul e 
.O501(8)(o) aft4(Qr 

(b) Class IA. Class IA shall include all bulk 
milk sold to other North Carolina distributors 
e? transferred betw ee n branches e* plants ef the 
same company for fluid use as defined in .0504(a) 
of this Rule including transfers for military usage 
for which a different producer price may apply. 
Also, Class I A shall include the sales of milk 
made directly to military installations for which 
a producer price different from the Class I price 
may apply. 

fef Class J-R may include all fresh slum milk 
an4 fresh milkfat which » s«44 e* disposed ©f fof 
consumption a* lowfat fresh white milk as 4e- 
fined m these regulations. 

(4) (c| Class II. Class II includes all milk re- 
ceived and not accounted for in Class I and Class 
IA, including plant loss or shrinkage volume not 
in excess of three percent of the total weight to 
account for as determined by the provisions of 
ft^fe .0506(e)(1) Rule .0508(a) of this Section. 
Class II utilization must be supported by com- 
plete and accurate records being maintained by 
the distributor which will account for the dispo- 
sition and use of all milk and milk products re- 
ceived including the allowable shrinkage or plant 
loss. 

(d) Classification of Transferred or Diverted 
Bulk Milk and Transfer of Packaged Milk. 



( 1) Transfer or diversion of bulk milk from 
the producers of a pool plant or pool co- 
operative to another pool plant shall be 
classified according to the classification 
usage of the receiving plant at North 
Carolina minimum prices. The classified 
use of the milk shall be reported to t he- 
shipper by the fourth day of the following 
month and payment made by the ninth 
day of the following month. 

(2) Transfer or diversion of bulk milk from 
producers or associations of producers 
from a pool plant to a nonpool plant shall 
be accounted for to the pool at the Class 
I_I price. I landling and hauling charges 
arc permitted after the notification of 
classification of producer milk is received 
from the pool in accordance with Rule 
.0513(f). 

Transfers of packaged milk from a pool 
plant to another pool plant or nonpool 
plant shall be classified and priced by the 
packaging distributor according to the 
commission announced prices as deter- 
mined in accordance with Rule .0507. 
(e) Reclassification of Inventory. When pro- 



tl) 



class, an adjustment shall be made to reclassify 
this volume of milk by accounting to the pool 
based upon the reclassification. This provision 
shall apply when the Class I and IA sales of a 
plant exceed the Class I and IA accounting to the 
pool and other sources; and when it is deter- 
mined that the excess Class I and IA sales over 
receipts were derived from inventory. 

(f) Weight Factors. To compute the weight 
of product pounds to be classified in each class, 
multiply the respective units by the proper weight 
factor determined on the basis of the following 
weights per quart: 

Product 

Whole Milk 

I,ow Fat Milk 

Low Fat Milk 

Skim Milk 

Buttermilk 

Flavored Milk (Choc, Fggnog) 

Flavored Milk (Choc., Fggnog) 

Milk Shake Mix (net) 

Fggnog (net) 

Cream 

( 'ream 

Cream 

Cream 

Cream 

Butterfat Content Weight Per Quart 



(3.25% min.) 
(1-2%) 

(■5-1%) 

(0-.99%) 

(0-.99%) 

(3.25%) 

d-2%) 

(4.0%) 

(6% and above) 

(10-17%) 

(18-28%) 

(29-32%) 

(33-39%) 

(40-49%) 



2.15 

2.155 

2.16 

2.16 

2.16 

2.00 

2.00 

2.00 

1.95 

2.13 

2.11 

2.09 

2.08 

2.06 



To compute the product weight of eggnog, sour 
cream, dip and milk shake mix, a different weight 
factor may be used due to a difference i in the 
nonmilk ingredients provided the difference is 
substantiated by filing an attachment to the re- 
port. 

Statutory Authority G.S. 106-266. 8 '(3) (7) (10). 



ducer or other source milk on hand in inventory 



NORTH CAROLINA REGISTER 



197 



PROPOSED RULES 



.0505 RULES OF CLASSIFICATION 
(REPEALED) 

Statutory Authority G.S. 106-266.8(3) (7 ')( 10). 

.0506 DETERMINATION OF EQUALIZATION 
PAYMENTS 

(a) Each handler shall obtain a supply of milk 
for its Class I and Class IA fluid sales from North 
Carolina base holding producers or from associ- 
ations, handlers or marketing agents which pur- 
chase milk from North Carolina baseholding 
producers. In the event that a handler purchases 
other source milk, the commission shall deter- 
mine in the manner outlined below whether and 
in what amount a handler shall make an equal- 
ization payment to the producer settlement fund. 

( 1 ) A handler who is not receiving a sufficient 
volume of fluid milk from North Carolina 
base holding producers or associations, 
handlers or marketing agents purchasing 
milk from North Carolina base holding 
producers, to meet its Class I and Class 
IA needs shall notify the commission by 
telephone of its requirements for addi- 
tional milk. 

(2) Upon receipt of such notice the commis- 
sion shall determine if milk is available 
from North Carolina base holding pro- 
ducers, handlers, producer associations or 
marketing agents purchasing milk from 
North Carolina base holding producers 
for delivery to such handler. In making 
this determination, the commission shall: 

(A) Contact handlers, producer associations 
and marketing agents known or consid- 
ered likely to have milk available from 
North Carolina baseholding producers, to 
determine whether such handlers, pro- 
ducer associations or marketing agents are 
willing to, and can reasonably supply the 
additional milk requirements of the han- 
dlers not receiving a sufficient volume for 
Class I or Class IA needs from North 
Carolina baseholding producers. 

(B) Consider the supply requirements of the 
sources contacted, the location of the 
available milk and the economic feasibility 
of transferring the available milk. 

(3) Should the commission be unable to lo- 
cate a supply of North Carolina base 
holding producer milk to cover the addi- 
tional needs of a handler for its Class I 
and Class IA sales, the commission shall 
issue a waiver for the volume requested 
within 36 hours following receipt of the 
notice of need. 



(4) Should a handler fail to notify the com- 
mission of its need for additional milk in 
accordance with (a)(1) of this Rule, or if 
the commission determines that milk is 
available from North Carolina producers 
and declines to issue a waiver, then such 
handler shall pay into an equalization 
fund on the volume of milk not covered 
by purchases from North Carolina 
baseholding sources and for which a 
waiver was not obtained in accordance 
with the following procedure: 

(A) On the volume of fluid milk purchased 
from other sources for Class I and Class 
IA sales, the handler shall pay into the 
producer settlement fund the difference 
between the announced Class I or Class 
IA price, as applicable, and the weighted 
average or blend price for North Carolina 
baseholding producers' milk as computed 
in accordance with the pooling computa- 
tions, multiplied by the volume of Class I 
and Class IA sales not supplied by milk 
purchased from sources supplied by 
North Carolina baseholding producers. 

(B) On the volume of milk reconstituted for 
Class I and Class I A sales, the handler 
shall pay into the producer settlement 
fund the difference between the Class I or 
Class IA price, as applicable, and the 
Class II price multiplied by the column 
of Class I and Class IA sales not supplied 
by milk purchased from sources supplied 
by North Carolina baseholding producers. 

(b) All equalization payments shall be remitted 
by the handlers to the commission for deposit in 
the producer settlement fund within ten days af- 
ter notification from the commission of the 
amount due and shall be included in the pool 
computations as outlined in Rule .0511(a)(4). 

Statutory Authority G.S. 106-266.8(3) (7 '). 

.0507 MINIMUM CLASS PRICES AND 
BUTTERFAT DIFFERENTIALS 

(a) Class I price for North Carolina Sales. Ef- 
fective August 4, 1986, the minimum Class I 
price to be pai4 North < 
as 



sociations ef produc e rs used for pool compu- 
tations for all milk which is processed in North 
Carolina and sold or disposed of for consump- 
tion or use as processed fluid milk products in 
North Carolina and classified as Class I, shall be 
the average price per hundredweight for manu- 
facturing grade milk, f.o.b. plants in Minnesota 
and Wisconsin, adjusted to a 3.5% butterfat basis 
as reported by the U. S. Department of Agricul- 
ture for the second preceding month plus five 



19S 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



dollars ($5.00) per hundredweight. The price 
generated under this procedure shall be adjusted 
according to the procedures outlined in Subpar- 
agraphs (a)(1) and (a)(2) of this Rule and the re- 
sulting price shall be announced in accordance 
with the procedure outlined in Paragraph (a)(3) 
of this Rule. 

(1) The price computed in (a) of this Rule 
shall be adjusted downward when the 
prevailing price for raw milk offered for 
sale or quoted to processors handlers or 
distributors located outside North 
Carolina for sales to be made into North 
Carolina, as defined in this Subparagraph, 
is below the price computed in (a) of this 
Rule. 

The prevailing price shall be defined as the 
most frequently utilized, most common, 
or predominant price offered or quoted 
by producers or associations of producers 
to processors handlers or distributors lo- 
cated outside North Carolina for Class I 
fluid milk which is to be sold or disposed 
of for consumption or use as processed 
fluid milk products in North Carolina. 
The Class 1 fluid milk price offered or 
quoted by any cooperative or federation 
of cooperatives for at least 51% of the 
volume of Class I fluid milk sales shipped 
into North Carolina by processors han- 
dlers or distributors located outside North 
Carolina shall be considered to be the 
prevailing price. 

(2) Should the commission determine that 
processors handlers located outside North 
Carolina will be paying various Class I 
prices for milk for sale into North 
Carolina and that a prevailing price, as 
defmed in (a)(1) of this Rule cannot be 
determined, the commission may adjust 
the price computed under the provisions 
of (a) of this Rule downward to a Class I 
price which it considers fairly represen- 
tative of the various prices to be paid to 
producers or associations of producers by 
processors handlers or distributors located 
outside North Carolina for Class I sales 
made into North Carolina. 

(3) The Class I price determined for any 
month shall be announced on or about 
the fifth and before the tenth of the month 
preceding such month and the price so 
announced shall be the price in effect for 
such month. 

(4) The Milk Commission reserves the right 
to suspend, in accordance with the proce- 
dures applicable for filing temporary rules 
as provided in the Administrative Proce- 



dures Act and rules, any price movement 
indicated by the procedures outlined in 
this Rule when the commission deems it 
advisable, 
(b) Class I Price for Sales Outside North 
Carolina. 

(1) Definitions. For purposes of this Regu- 
lation, the following definitions shall ap- 
ply: 

(A) "Sales outside North Carolina" shall 
be defmed as sales of Class I fluid milk 
which is processed in North Carolina and 
sold or disposed of for consumption or 
use as processed fluid milk products into 
other states. If the point of such con- 
sumption or use cannot be reasonably 
determined by the commission, then such 
sales shall be considered to be a sale where 
the distributor handler is located. 

(B) "Prevailing Price" shall be defined as 
the most frequently utilized, most com- 
mon, or predominant price for Class I 
fluid milk paid to producers or associ- 
ations of producers by procosooro handlers 
located m such area for milk which is sold 
or disposed of for consumption or use as 
processed fluid milk products in those 
areas. The Class I fluid milk price of any 
cooperative or federation of cooperatives 
having at least fifty-one percent of the 
Class I fluid milk sales in a given area shall 
be considered to be the prevailing price for 
that area. 

(2) The price to be paid producers used for 
pool computations for the product 
pounds classified as Class I and sold out- 
side North Carolina shall be as follows: 

(A) Virginia. For sales in Virginia the price 
shall be the actual price established by the 
Virginia Milk Commission for milk con- 
taining three and one-half percent 
butterfat or the prevailing price whichever 
is higher. 

(B) Federal Order Areas and South 
Carolina. 

(i) For sales into all federal order areas 
and South Carolina, the minimum price 
to be paid to producers or associations 
of producers shall be the prevailing 
price being paid to producers or associ- 
ations of producers by processors han- 
dlers located in such areas for milk 
containing three and one-half percent 
butterfat which is sold or disposed of 
for consumption or use as processed 
fluid milk products in those areas. 
Prior to announcing the prevailing 
price, the commission shall: 



NORTH CAROLINA REGISTER 



199 



PROPOSED RULES 



(I) provide all North Carolina 
processors handlers (and their sup- 
plying producer cooperatives) which 
have Class I sales outside North 
Carolina with a reasonable opportu- 
nity for input to the commission as 
to the price or prices being paid for 
raw milk for the areas into which 
they sell; and 

(II) contact procosooro handlers outside 
North Carolina which have sales into 
such areas in an attempt to gather 
probative information as to the price 
or prices being paid for raw milk. 

(ii) Should the commission determine 
that processors handlers are paying 
various Class I prices and that a "pre- 
vailing price" as defined for a state or 
federal order area cannot be conclu- 
sively determined, the commission may: 
(I) announce the "prevailing price" 
for regions, geographic territories, or 
locales within such state or federal 
order area; or 

(II) announce as the price for an entire 
state or entire federal order area a 
price which it considers to be fairly 
representative of the various prices in 
effect in each state or federal order 
area by computing the weighted av- 
erage of the Class I prices in effect for 
an appropriate area based upon doc- 
umented invoice prices or Class I 
payrolls for non-members; or 

(III) announce as the price a weighted 
average price as near as it can be de- 
termined of the varying Class I prices. 

(4} Deductions t+f credits. When the price 
is announced fof sal e s outside ef North 
Carolina, the commission shall also- an- 
nounce a maximum deduction ef credit 
which may be allowed from this price af- 
tef considering the servic e charges fo effect 
to such stat e &t federal order area. 

<rM Hi Announcement. The prices for milk 
sold in other states or markets shall be 
announced and a notice mailed to all li- 
censed distributors handlers at least ten 
days prior to the effective date of such 
prices. 

f§) [4| Adjustment. The prices for milk sold 
in other states or markets shall be adjusted 
downward for the purposes of auditing to 
the price agreed upon and announced by 
the cooperative groups of producers sell- 
ing milk in the markets affected, 
(c) Class IA Price. The price to be paid North 
Carolina producers ef North Carolina associ 



ationo &i producers used for pool computations 
for the product pounds classified as Class IA 
shall be the weighted average price on a three and 
one-half percent butterfat basis for sales or 
transfers of milk computed in accordance with 
the provisions as outlined in Rul e .0505(d) Rule 
.0504(d)(1) of this Section. Further, the Execu- 
tive Secretary is authorized to announce the 
minimum prices to be pei4 producers used for 
pool computations for milk used to supply gen- 
eral issue and commissary contracts for military 
installations. The minimum prices announced 
shall be applicable to the bids made during a 
specified period and remain in effect for the du- 
ration of the contract. After all handler utiliza- 
tion reports are received by the commission. 
Class IA product pounds shall be pooled with 
Class 1^ and when payment notification is made 
to producers, the Class IA payment is to be 
combined with Class JL 

(d) Class W Price, tte minimum pric e to be 
paid producers fof the product pounds classified 
a* Class iU- m the designated marketing areas 
shall be as follows: 

M£k Marketing Afeas I,^^^^ V4r V4h; 
VIII, tX- a«4 X — the Class I pric e generated by 
the procedure as outlined m fa} ef this Rule a«4 
announced by the commission fof milk contain 
iftg three a«4 one half percent butterfat. 

fo) (dji Class II Price. The price to be paid 
producers accounted to the pool for the product 
pounds classified as Class II shall be a weighted 
average price pef hundredweight e£ the pric e s 
which afe computed fo accordance with the feh- 
lowing provisions: the announced Class II price 
of the commission. The announced Class 1^ 
price shall be the average price per 
hundredweight for manufacturing grade milk, 
f.o.b. plants in Minnesota and Wisconsin, ad- 
justed to 3.5% butterfat basis as reported by the 
U.S. Department of Agriculture for the second 
preceding month. 

(-ty 4-he pric e to be appli e d fof the product 
pounds ef bulk milk seld as Class H to 
another Grade A ffoid milk- plant shall be 
the price received. I Iowever, the selling 
plant may make such deduction a* pfe- 
v*4ed fof" m .0505(d)(1) a«4 (3) ef this 
S e ction but i» && ease shall the resulting 

nn r-A 1^^ 1 I > L " C tVi'in tl^j I 1 ■ i . ■• I I rin.'»i^ -t t^ 
PTT^T l.-^, IV- \TJ 1 1 1UI I 1 1 1VJ ^^TCTTT^ TT I ' I It^J 111 I 

nouncod monthly by the Milk Commis 

f2} T-he pric e to be applied to the product 
pounds ef bulk milk se44 te- a company 
operating a non grade A plant (h e r e inaft e r 
referred te as a manufacturing plant) fof 
the manufacturing ef by products only, 
shall be the pric e received; provided, a 



200 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



maximum receiving atto handling allow 

r\ti ,^a nl <'i" ^^^^^^ li.ll lilt nor 

ui n'Cf rrr cvn cv in j i .v \j . i \j j ifui 

hundredweight may- be doductod when 
such fttok- is actually receiv e d to the plant 
to toe shipper. t>to rec e iving ef handling 

nlliTiiifinnii f Vi ft 1 1 1^^ .1... lii, •♦,■,! 4<-j-\ rvi tl^^ «-i«-i . • , t 

n^^^^^mTTiLT-- en iu.ii 1^7 uvu uui \.^i 1 1 17 1 1 1 1 1 iv pTTvv 

received e» sales to a manufacturing plant 
when ouch mi lit is diverted directly from 
farm routoo to a manufacturing plant. 
Further, »» receiving ef handling allow 
ance shall be permitted »» the sale ef 
transf e r ef Class H milk between plants 
to toe samo company. Further, e» foe 
sale ef transfer to milk to a manufacturing 
plant foe actual add i tional transportation 

C t rrrtO 1 1 1UT t*r? it I *iTTTT?tT 11/ stlC't I rruitrTT 1 . 

1 lowev e r, to computing the necessary ad- 
ditionul transportation, a distributor must 
take toto consideration the mileage ef a 
diverted farm route and- the hauling al- 
ready pafo by producers to arriving a* the 
additional transportation costs which may 
be applied. 

Oft shipments to milk from a North 
Carolina producer pool to a plant located 
outsid e toe Stat e ef North Carolina, toe 
selling distnbutor shall classify as Class J- 
all such shipments except when toe ship 
ping distributor obtain ', from toe out of 
state purchaser a certif i cation as to toe 
actual ese affo disposition to such milk 
ae4 when such certification is toed with 
toe Milk Commission monthly report. 
(t£) 4foe price to be applied tor- toe remaining 
product pounds to Class H shall be toe 
three and- one half percent price det e r 
mined by computing toe simple averag e 
to toe Minnesota Wisconsin price series 
fof manufacturing milk and- a butter 
powder price series determined to accord 
ance with toe procedure specified to tois 
Subsection: 

^ 1 1 J I RO I'll \-^J IV t I ^J B3CQ TTTT 1 1 ll. 1 

Minnesota Wisconsin pric e series shall be 
toe thre e aed- one half percent price ae- 
nounced by toe United States Departm e nt 
to Agriculture, Statistical Reporting Sef- 
vice, Crop Reporting Board, fof toe aver 
age pric e r e ceived by farmers fof 
manufacturing milk to toe Minnesota 
Wisconsin afea fof toe previous calendar 
month. 

1 l< 1 I t~» 1 ^ »t Qfli > 1 s~l Kn hi ,1.1 1 1-\ f <l--,i KiiHnf 

rTTT 1 1 l\J E I I IW ll_T l.'V Li 11JU 1171 1 1 HJ I'UllL'I 

powder price series shall be detenninod to 

accordance wifo toe following procedure: 

ft) Multiply by 4-2- toe average to toe 

Chicago butt e r price fof Grade A (A3- 

score) bulk creamery butter as reported 



by toe United States Department to 
Agriculture to toe previous month, us- 
tog toe mid point to" any range as ene 
price. 

/ « « J A.lllltinlll l^^i V I 1 \-\ ,1 ■ T m. ttl-i i r\ r\ nira-ofw, 

\**J If ILHIIJJI J LJJ TTTE 11 HJ VI UI^IIICU LlTfJlTigU 

pric e pef pound fof carload fots ef 
non fat dfy milk solids (spray process), 
fof human consumption f.o.b. manu 
facturing plants to toe Chicago area, as 
publishod by toe United States Depart 
mont ef Agriculture fof toe monthly 
period ending e» toe 24fo to toe pfe- 
coding month. 
(fo) From toe sem to toe result to" Para 
graphs ff> a«4 (&} to tois Subsection 
deduct a differential to eee dollar a&d 
twenty fivo cents ($1.25). (This differ 
ential shall be adjusted to June to e ach 
yeaf based upon toe annual percent to 
change to toe Producer Pric e Index 
(formorly Wholesale Price Index), as 
computed aed- publishod by toe United 
States Department to Labor fof 
March.) 

44*© adjustment shall be computed aed- 
announced to Juno each yeaf aed- shall 
apply to toe pric e announced fof J-toy 
each year. '4foe tost- adjustment under 

<hw U uln l- It - i 1 1 • i f\r.l t I t i-\ <l-i,i «aaa ■"»■'* n n 

rTTTTf I 1. U 1 U rrTTTTTT III 'I 'IT W7 I Mr r*TTT^? Utl 

nounced fof J-toy 1085. 
fG} Compute a simple averag e to toe 
Minnesota Wisconsin price series a©4 toe 
butter powder prico series rounded to toe 
nearest eeto (.005 shall be rounded to toe 
next ftol cent), based upon toe informa 
ffoft from toe sources specified ae© to ae- 
cordano e with toe procedure outlined. 
4toe three afto one half percent prico thus 
computed shall be announcod by toe 15th 
to toe month and- shall apply to deliveries 
made during toe next succeeding month 
ef accounting period. 
(4) (e) Butterfat Differentials. For Class I, Class 
IA, and Class II milk, each distributor handler 
shall pay producers the minimum butterfat dif- 
ferential per hundredweight as announced by the 
commission on or about the fifth of the month 
to apply to all deliveries made during that month, 
ef accounting period. The minimum differential 
for each month ©f accounting period shall be 
determined by multiplying the average Chicago 
92 score butter price for the previous month, as 
reported by the U.S. Department of Agriculture, 
Crop Reporting Board, by 0.10 and rounded to 
the nearest one-tenth cent ($0,001) (0.0005 shall 
be rounded to the next 1/10 cent). 

In making payments to each producer, a dis- 
tributor handler shall add the minimum of the 



NORTH CAROLINA REGISTER 



201 



PROPOSED RULES 



applicable huttcrfat differential per 

hundredweight for each 1,'lfJ of one percent that 
each producer's milk is above three and one-half 
percent buttcrfat and shall not deduct more than 
the minimum of the applicable butterfat differ- 
ential per hundredweight for each 1/10 of one 
percent that each producer's milk is below three 
and one-half percent butterfat. 

(g) (f) Premium for Breed Milk Sales. Each 
distributor handler shall pay breed producers a 
minimum of twenty cents ($0.20) per 
hundredweight for all breed milk (sold by the 
distributor handler as breed milk at a premium 
price) in addition to the established Class I price. 

fb+ Minimum Pric e to be Paid by a Distributor 
fef Class JA Milk. 44** minimum prices U* be 
paid by tbe purchasing distributor tft other tfc- 
tnbutors fof Class J-A- milk shall ne4- be le** than 
tbe class use minimum producer prices estab 
lished fof t4n» m ark e ting afea h* which tbe pur 
chasing distributor is located. 

(++ Minimum Price fof Milk Sold ift Established 
Mark e ting Areas, bach distributor located m aft 
uncontrolled afea- m North Carolina, who dis- 
tributes milk tft other establish e d marketing areas 
ift North Carolina, shall pay producers ftt* les* 
than t-be minimum producer pric e established fef 

t l-i ■ 1 1 pg T-t j ■» i 1-. < c * q * a ] i ''!■'■' t K ■ 1 1 1 1 »-.a i j y], 1 i ii I \i m. »,r 
rrmT i tit t ui in.' i t. * mi c *t.ii^ . * uiui ui \_ .'i.'iu ii i *. j i i i\- 1 

established marketing areas h* North Carolina. 
Statutory Authority G.S. 106-266.8(7) (10). 

.0508 PLANT SHRINKAGE 

(a) To compute the plant loss or shrinkage for 
each month the following procedure shall be fol- 
lowed: 

( 1 ) .Add the weight of all milk and cream 
products containing butterfat or milk sol- 
ids in any form received from producers 
or other sources, and the weight for any 
volume of milk reconstituted. Deduct 
from the resulting total weight computed 
in accordance with the above, the weight 
of any cream, powder or condensed milk 
received which is transferred directly for 
use in the manufacture of by-products 
such as ice cream and cottage cheese to 
determine a sub-total -- Net receipts to 
account for. Add to this sub-total the 
beginning bulk and package inventories to 
determine the total weight of the milk and 
milk products to account for. 

(2) Add the weight of all milk, cream, and 
milk products containing buttcrfat and 
skim milk ingredients used and disposed 
of in the following manner: 

Packaged and bulk sales and transfers (do 
not include animal feed sales); ending in- 



ventories; milk solids in reconstitution; 
the weight of any unusual loss which is 
allowable as provided for in Paragraph (b) 
of this Rule; transfer to the manufacturing 
of by-products such as ice-cream and cot- 
tage cheese less the weight of ingredients 
deducted in accordance with (a)(1) of this 
Rule, which were purchased for direct use 
in manufacturing by-products. The 
transfer weights to manufacturing must 
be supported by complete and adequate 
records. Such manufacturing records 
must be made available for inspection and 
audit purposes. 

(3) Determine the allowable loss or shrinkage 
by multiplying the total weight of the milk 
and milk products to account for in (a)(1) 
of this Rule, by three percent. 

(4) Determine the actual loss or shrinkage or 
gain by subtracting the total weights ac- 
counted for in (a)(2) of this Rule from the 
total weight to account for in (a)(1) of this 
Rule. 

(5) When the actual loss or shrinkage exceeds 
the three percent amount determined in 
(a)(3) of this Rule, the excess loss or 
shrinkage must be added to the Class I 
volume for pool computations, except 
that the excess loss or shrinkage may be 
prorated based on the source of net re- 
ceipts as computed in the net sub-total in 
(a)( 1) of this Rule. When the net receipts 
to account for in (a)(1) of this Rule in- 
clude receipts of ingredients from sources 
other than producers or from reconsti- 
tution, determine the percent that pro- 
ducer receipts are to the sub-total -- net 
receipts to account for. Apply this per- 
cent to any excessive loss or shrinkage to 
determine the weight adjustment to be 
added to Class I. Such adjustment shall 
be classified as Class I in the month fol- 
lowing the month in which such loss oc- 
curs. 

(b) Unusual Loss of Milk. When an unusual 
loss in bulk, processed, or packaged milk is ex- 
perienced from an act or condition over which 
the handler has no control, the Milk Commission 
will consider administrative relief if such request 
is made as soon as possible by telephone to the 
commission office, and such telephone call is 
immediately confirmed by a written certification 
from such handler. The written certification 
must be submitted jointly by the plant super- 
intendent and the highest other executive of the 
plant where the loss occurred. On any such re- 
quest, if approved, a written waiver will be fur- 
nished to the handler and such waiver must be 



202 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



attached to the report for the month in which 
such loss occurred. Upon receipt of a waiver, a 
handler must maintain all related records for au- 
dit examination. 

Statutory Authority G.S. 106-266.8(3) (7). 

.0509 PRODUCER SETTLEMENT FUND 

The Milk Commission shall establish and 
maintain a separate fund known as the "producer 
settlement fund" into which the commission 
shall deposit all payments made by handlers 
pursuant to Rules .0506, .0511, .0512 and .0513 
of this Section from which the commission shall 
make all payments pursuant to Rules .0506, 
.0511, .0512 and .0513 of this Section. Any 
payments due a handler or association of pro- 
ducers shall be offset by any payments due from 
such handler or association of producers. 

Statutory Authority G.S. 106-266.8(3) (7). 

.0510 HANDLER AND PRODUCER PAYROLL 
REPORTS 

(a) On or before the sixth day of the following 
month, each handler shall report to the Milk 
Commission on forms furnished by the Milk 
Commission as follows: 

(1) The base of each qualified base holder in 
accordance with Rule .0516(e)(2) and the 
receipts of all North Carolina baseholding 
milk and receipts of milk from other 
sources including milk diverted from other 
pool plants to such handler. 

(2) Receipts of packaged milk from other 
handlers, receipts from reconstitution, and 
any or all other fluid milk products and 
bulk milk and cream products. 

(3) The utilization and disposition of all milk, 
filled milk, reconstituted milk, and milk 
products reported pursuant to (a)(1) and 
(a)(2) of this Rule. 

(4) The transfer and diversion of all bulk milk 
and milk products not reported in Para- 
graph (a)(3) including such diverted milk 
designated by the handler under the pro- 
visions of Rule .0501(23)(b) and the value 
received for this volume. 

(5) The handling and hauling charges incurred 
in the movement of bulk milk from one 
pool plant to another pool plant subject 
to the provisions of Rule .0513(f). 

(6) Inventories at the beginning and end of the 
month of all fluid milk products and other 
products specified in this Rule, when so 
requested. 

(b) On or before the sixth day of the following 
month, each producer association shall report to 



the commission on the forms furnished by the 
commission, the following information: 

(1) The base for each qualified base holder in 
accordance with Rule .0516(e)(2) and the 
receipts of all North Carolina baseholding 
milk and receipts of milk from other 
sources including milk diverted from other 
pool plants to such handler. 

(2) Transfer and disposition or diversion of 
all milk received from producer sources 
and other sources to any Grade A or 
manufacturing outlet wherever located in- 
cluding such diverted milk designated by 
the handler under the provisions of Rule 
.0501(23)(b) and the value received for 
such milk. 

(3) The handling and hauling charges incurred 
from one pool producer association to 
another pool plant or pool producer as- 
sociation subject to the provisions of Rule 
.0513(0- 

(c) On or before the fifth day of the following 
month, the purchaser of bulk milk shall furnish 
the seller a record by classes as to the use of all 
milk received. Payment shall be made by the 
ninth day of the following month. 

(d) On or before the eighteenth day of the fol- 
lowing month each handler and cooperative shall 
file with the commission on forms furnished by 
the commission, a complete report of all receipts, 
sales, and utilization and a producer payroll 
showing the allocation and gross payment to 
each producer. 

Statutory Authority G.S. 106-266.8(3), (5), (7), 
(12), (14). 

.0511 UNIFORM CLASS 1 AND CLASS II 
PRICES: POOL OBLIGATION AND 
BLEND PRICE 

(a) After receiving the preliminary utilization 
reports filed by the handlers and associations of 
producers under the provisions of Rule .0510 of 
this Section, the commission shall determine the 
volume of qualifying North Carolina baseholding 
producer milk to remain in the pool, as defined 
by Rule .0501(22) and (23) of this Section, (il- 
lustration - 70% month. Production of 
1,000,000 pounds. Class I 600,000 pounds. Di- 
vide 600,000 pounds of Class I by .70 to deter- 
mine the volume of milk to remain in the pool. 
Volume of milk to remain in the pool would be 
857,142 pounds.) 

(b) After determining the volume of qualifying 
North Carolina baseholding producer milk, the 
commission shall determine uniform prices for 
Class I and Class II milk containing 3.5 percent 
butterfat as follows: 



NORTH CAROLINA REGISTER 



203 



PROPOSED RULES 



( 1 ) Calculate the value of qualifying North 
Carolina baseholding milk classified as 
Class I and IA for each handler. For 
purposes of these calculations, Class I and 
IA shall be combined in accordance with 
the provisions of Rule .0507(c). 

(2) Calculate the value of qualifying North 
Carolina baseholding producer milk clas- 
sified as Class II milk for each handler. 

(3) For any handler which is also regulated 
under a federal milk marketing order, or 
another state milk marketing order, adjust 
the Class I value computed for such han- 
dler either by: 

(A) subtracting an amount equal to the 
amount of any payment remitted to a 
producer settlement fund of such federal 
milk marketing order, or any amount 
above the North Carolina pool value for 
any difference in the Class I and Class II 
allocation paid under the requirements of 
a state order, or by 

(B) adding an amount equal to the amount 
of any payment received from the pro- 
ducer settlement fund of such federal milk 
marketing order or any amount received 
above the North Carolina pool value for 
any difference in the Class I and Class II 
allocation paid under the requirements of 
a state order. 

(4) For each handler, add to or deduct from 
each respective class any amount owed to, 
or credit due from the North Carolina 
pool for previous months resulting from 
any corrections or adjustments or 
amounts owed for equalization payments 
under Rule .0506. 

(5) For each handler, deduct from the value 
for the respective classes any handling or 
hauling charges incurred by a handler or 
cooperative in transferring or diverting 
Class I, I A or Class II bulk milk from one 
pool plant to another. The handling and 
hauling charges applicable are those out- 
lined in Rule .0513(f). 

(6) Combine the values in Paragraphs (a)(1) 
through (a)(5) of this Rule to determine 
the Class I value, the Class II value and 
the total pool obligation for each handler. 

(7) Aggregate the values and volumes for 
Class I and Class II for all qualifying 
North Carolina producer milk for all pool 
handlers to determine the total pool vol- 
ume and value for Class I and Class II 
milk. 

(8) To the resulting total pool values for 
Class I and Class II milk, add one-half of 
the reserve balance in the producer settle- 



ment fund for the previous month, pro- 
rated between Class I and Class II on the 
basis of the percentage of utilization in 
each class. 
(9) Divide the value determined for Class I 
and Class II for all qualifying North 
Carolina baseholding producer milk for 
all handlers by the total volume of Class 
I and Class II milk respectively; the results 
being the average price per hundredweight 
for Class I and Class II milk respectively. 
(10) Subtract not less than four cents ($0.04) 
per hundredweight but not more than five 
cents ($0.05) per hundredweight from the 
average price per hundredweight for Class 
I and Class II milk determined in Para- 
graph (a)(9) of this Rule as a reserve for 
the producer settlement fund. 

(c) The results of the computations in (b) of 
this Rule shall be the uniform prices for Class I 
and Class II milk and shall be the prices appli- 
cable to the volume of each handler's Class I and 
Class II qualifying North Carolina baseholding 
producer milk as allocated and determined in ac- 
cordance with the procedures outlined in Rules 
.0511, .0512 and .0513 of this Section. 

(d) To determine the pool blend price or 
weighted average price for calculating an obli- 
gation to the pool for equalization payments un- 
der Rule .0506, divide the combined value by the 
combined volumes as determined in Paragraph 
(c) of this Rule. 

Statutory Authority G.S. 106-266.8(3) (7 ')( 10). 

.0512 COMPUTATION OF SETTLEMENT 
FIND AMOUNTS 

(a) After the commission hasdetermined the 
volume of North Carolina baseholding producer 
milk to remain in the pool under the provisions 
of Rule .051 1(a), the commission shall determine 
for each handler or association the amount of 
base which will be used in the pool settlement 
computations by dividing the volume of qualify- 
ing North Carolina baseholding producer milk 
by the total qualifying North Carolina bases in 
accordance with Rule .0516(e)(2) to determine 
the percentage of base to remain in the pool 
computations, (illustration - Qualifying North 
Carolina baseholding producer volume = 
857,142 lbs. from Illustration in Rule .0511(a). 
Base = 1,000,000 pounds. Divide 857,142 
pounds of qualifying North Carolina baseholding 
producer volume by 1,000,000 lbs. of base = 
85.7142%. To determine the amount of quali- 
fying North Carolina producer base to remain in 
the pool, multiply 1,000,000 pounds x .857142 
= 857,142 lbs. of base to remain in the pool.) 



204 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



(b) After making the calculations required by 
Rule .0501(23) in accordance with Paragraph (a) 
of this Rule, determine the volumes of milk uti- 
lized in Class I and the volumes utilized in Class 
II for all handlers as outlined in Rule .051 1. The 
Class I and Class II volumes utilized shall be al- 
located among all handlers or associations of 
producers using the following procedure: 

(1) Aggregate the total bases for each handler 
or association of producers determined in 
accordance with Paragraph (a) of this 
Rule and Rule .0516(c)(2); the total being 
the qualifying base for such month. 

(2) Calculate the percentage of volume uti- 
lized in Class I to the total base for the 
pool and use this percentage to determine 
the volume to allocate to each handler in 
the pool as Class I. 

(3) Subtract the Class I volume from the total 
qualifying North Carolina baseholding 
producer volume purchased by each han- 
dler to determine the Class II volume. 

(c) After determining the allocation of Class I 
and Class II milk allocated to each handler or 
association, apply the Class I and Class II uni- 
form prices determined in Rule .0511(c) of this 
Section to these volumes to determine the value 
of the qualifying North Carolina baseholding 
producer milk for each handler or association. 

(d) The value of qualifying North Carolina 
baseholding producer milk of each handler or 
association as determined in (c) of this Rule shall 
be compared to the value of the pool obligation 
as computed in Rule .0511(b)(6) of this Section 
to determine if a payment is to be made to the 
pool or if funds are to be drawn from the pool. 
If payment is due the pool, the commission shall 
notify each handler or association by the ninth 
day following the end of the month. Such pay- 
ment shall be made to the commission by the 
eleventh day following the end of the month. 

Statutory Authority G.S. 106-266.8(3) (7) (10). 

.0513 METHOD OF SETTLEMENT 

(a4 Final Settlement. Each distributor m tba 
marketing afaa shall make faff aa4 complete 
payment ta producers e» af before tha 15th day 
following tha clos e af e ach cal e ndar month af 
approved accounting p e riod at aat less than tha 
minimum sktse prices a* specified » .0507 af this 
Section. 

(b4. Partial Payments. Upon request, a partial 
payment shall ba paid to a produc e r aat lat e r 
than tha last- day af tha delivery p e riod faf milk 
received during tha fifst half af such delivery pa- 
riod. A producer's request faf a partial payment 
shall ba honored faf aa amount ap ta 40 percent 



af hi* previous month's Hat utilization value 
computed ta tha nearest &&& hundred dollars 
($100.00); provided, a oufficient volume af walk 
ha* baaa delivered faf tha fifst half af tha month 
af pay p e riod ta justify such payment. Further, 

in 1 1 1 > 1 1 sp* Tu f 1 " ' ' * a o i tT"U"n in t ni tJafl «~- a «"+ « - "» I *•* • ■ ' ■t-n.mi 
m uv iwi li ii j lxj ie mu m.1 i iv enn wi i iiv uui Liiu iju f rTr^lTT' 

t 1 \ Li«A T~t~i ' I i 1 i I III.' t 1 I f I n 1 ~~ 1 it I ~\ T t 1 1 ■ ■ i .' tnl/n 1 11 4 n nfnni i^t 
* vy i—* v 1 1 kC^CV^^ ^T^^t Ul JLi 1 v. r Ul KJ 1 ^^^T^^r ^TT^^^T tffl^T CH^CTTT!*TTT 

aooignments aa4 such other deductions a* are 
authorized by the producer. 

A producer faay request tbat- a partial payment 
ba mad e a» a regular basis af f»ay r e quest a sta- 
g4a af limit e d number af partial payments, J» 
addition ta tha proceduro outlined, a distributor 

m 'IV Til 'III l^ "'"^'"l Qfl] m arN<r t j-y o nrn.li nvir ■-. » ,- 1 1 ,-»1-i 

I III! T 1 1 ltLn.V J_ ' HI 1 1 LU J '11 Til I^IT ITT TTT CT L'l UUUW?T HT ■.lU-Uli 

taaa af times aa4 i» such amounts as ma? ba 
agreed upon b e tween tha twa partios. 

{ s*i I ■ 'iph 11 1 B t r* p * 1 * 1 a *• da a 1 ] pa al&a r-* 1 .-.1% ,-1 -..jiir-ti^nr 

\"/ CW I UT -T*T ILIUUM rTIlLIU 1 1 llll\l? SUl 1 ! T OtJWTlC' lll_'l I "I 

from funds owed ta a producer as authoris e d by 
tha producer. 

(4) Each distributor shall make tha nocoosary 
adjustments ta correct any error i» classification 
af payments ta producers fof past- deliv e ry p e ri 

(a4 Statement ta Producers. Each distributor 
shall furnish ta each producer af association af 
producers faf each delivery period a statement m 
writing which may ba r e tained by tha producer, 
showing tha following: 

(4-) tha identity af tha distributor, 

(3) tha deliver/ period, 

(44. producer base faf period, 

(4) butt e rfat testr 

(44 pounds af milk ta each class, 

f64 class priooo, 

(4+ gross amount faf each class, 

(&4 each deduction mad e by tha distributor, 

(4} aat amount paid. 
(f4 Aft association af producers may reimburse 
processors ta whom tbay sea milk, af a processor 
faay make a deduction from aa individual pro 
ducer from whom milk is purchased, faf tha fak- 
lowmg services aa4 east- savings at- tha rates 
listed: 

(44 f4ak4 s e nde e s: fa»f cents (SO.0 ' 1) pef 
hundredweight; 

(4| testing faf butterfat, bacteria aa4 antibiot 
ias^ throe cents ($0.03) paf hundr e dweight; 

filing reports aa4 preparing ch e cks: three 
cents ($0.03) paf hundredweight; 

(4) east savings ta aa association af aft indi 
vidual produc e r r e sulting from tha recoiv 
i»g af millc €m tha basis af producer 
weights aa4 tests: nine cents ($0.09) paf 
hundredw e ight; 

fS4. east savings ta a» association af a» indi 
vidual producer r e sulting from r e c e iving 



NORTH CAROLINA REGISTER 



205 



PROPOSED RULES 



milk eft a uniform basis- three seats 

(SO. 03) pef hundred weight. 
Prior te receiving a reimbursement from a» as- 
r . ocmtion el producers, a written agreement be- 
tween the processor a«4 the association ef 
producers must be eft file with the procossor 
identifying these services a»4 ee*t savings which 

11 -ill t-» . i «-. > r-4 . ^ r-t T -. , . . 1 V~t I fK i tM-,-1,',1, , ,Tf t ."I 11 l-> Q -r>1 .11.11 

■ • 111 I ^_" rtTTTTTTTTvW "J * ■ *" I "1 UIV .' ~'KJ I IU TTTTCTTT JUl II 

association sells. 

Prior te making a deduction from a» individual 
producer, a processor must have a written *h- 
thorii'.ation from such producer identifying the 
servic e s a»4 ees* savings which wftl he performed 
by- the processor te whom such producer s e lls. 

4-he commission shall venfy that the specific 
services a«4 eest savings aw performed fof the 
reimbursement mad e by- a» association ef pro 
ducers ef fe? the deduction made from a» indi 
sidual producer. 

i^t»f purpos e s ef tbt* Subsection, the eest 
savings resulting from receiving milk eft the basis 
ef producer weights a«4 butterfat tests shall mean 
tfte process . or shall acc e pt the farm tank weight 
tickets fi*f individual producers &ft4 the butterfat 
tests resulting from the sample drawn at- the time 
ef pickup. Cost savings resulting from receiving 
milk eft a uniform basis shall mean that- the 
processor '' hall accept milk eft a regular basis at 
agreed times ef delivery seven days pef week; 
provided, shipments from individual producers 
may he eft aft every other eay- deliv e ry basis. 

la) On or before the ninth day following the 
end of each month, the Milk Commission shall 
notify all handlers and or cooperatives of the 
following information: 



( 1 ) The monthly uniform price per 

hundredweight to be paid producers for 
milk classified as Class I and Class I_I al- 
location. 



(2) A schedule showing the Class I and Class 
II allocations of the producer receipts and 
other source milk and the amounts due 



Q] 



producers in each Clas 



The monthly blend or average price is de- 
termined by Rule .0511(c). 
(b) On or before the eleventh day following the 
end of each month, any handler or association 



cu pro 



ducers whose net utilization 



baseholding milk on 3_5 percent butterfat basis 
exceeds the statewide pool blend prices and blend 
classification, shall make payments to the com- 
mission as computed in Rule .0512(d) of this 
Section. 

(c) On or before the thirteenth day following 
the end of each month, the commission shall pav 
from the settlement fund to anv handler or asso- 



baseholding producer milk of that handler or as- 
sociation of producers up to the uriifonn value 
of the statewide pool. 

(d) On or before the thirteenth day following 
the end of each month, each handler shall make 
full payment to any association of producers 
from which it has received milk, according to the 
classified utilization for each handler at the class 
prices announced hv the commission. 

(e) After notification to the handler of the uni- 
form Class I_I price and pnor to payment to pro- 
ducers, adjustments shall be made in the value 
due for Class U by determining a revised Class 
H price to reflect any differences between the 
announced Class H price and the price received 
for milk sold to: 

( 1) a nongrade A plant for use in the manu- 
facture of non.grade A products, 

(2) a Grade A manufacturing plant, which 
does not process fluid milk, for use in the 
manutacture of butter, cheese, powder or 
other manufactured products. 

No adjustment shall be made from the an- 
nounced Class H price for any milk sold or 
transferred to any plant which also processes 
fluid milk which will result in a price le >s than the 
announced Class H price. 

1 he handling and hauling charges permitted 
shall be determined in accordance with Rule 
.0513(f) of this Rule. 



ciation of producers an amount that will bring 
the value of the qualifying North Carolina 



(f) Certain handling and hauling charges on the 
sale or transfer ot bulk milk to a pool or nonpool 
plant may be deducted bv the handler or associ- 
ation of producers. I he allowances or charges 
permitted are outlined below: 

( 1) A handling allowance may be deducted 
o_n the sale or transfer of bulk milk di- 
verted directly from farm routes to a pool 
plant or a Grade A nonpool plant, but 
such allowance shall not exceed fifteen 
cents (SO. 15) per hundredweight. On milk 
received in the pool plant and reloaded for 
sale or transfer, a handling allowance may 
be deducted but such allowance shall not 
exceed twentv-five cents ($0.25) per 
hundredweight. On bulk milk transferred 
to a company operating a nongrade A 
plant I herein referred to as a manufactur- 
ing plant) for the manufacturing of non- 
grade A products only, or to a Grade A 
manufacturing plant, which does not 
process fluid milk, for use in the manu- 
facturing of butter, cheese, powder or 
other manufactured products. A maxi- 
mum receiving and handling allowance of 
ten cents (SO. 10) per hundredweight may 
be deducted when such milk is received in 
the plant of the shipper. 



206 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



(2) Only the actual additional transportation 
costs may be applied to the sale, transfer 
or diversion of bulk rrulk. In computing 
the necessary additional transportation, a 
handler must take into consideration the 
mileage of a diverted farm route and the 
hauling already paid by producers in ar- 
riving at the additional transportation 
costs which may be applied. 
(Si On or before the fifteenth day following the 
end of each month, the handler or association of 
producers shall make payments to producers or 
associations of producers according to the pool 
classification and prices as determined in accord- 
ance with the pooling procedure, after making 
such adjustments as are permitted under the 
provisions as contained in Paragraphs (e) and (f) 
of this Rule. 

(h) Fach handler or association of producers 
shall make such deductions from funds owed to 
a producer as authorized by the producer. 

(i) Each handler or association of producers 
shall make the necessary adjustments to correct 
any error in classification or payments to pro- 
ducers or associations of producers for past de- 
livery periods. 

(j) Statement to Producers. Fach handler or 
association of producers shall furnish to each 
producer or association of producers for each 
delivery period a statement in writing which may 
be retained by the producer, showing the follow- 
ing: 

( 1) the identity of the handler or association 
of producers, 

(2) the delivery' period, 

(3) producer base for period, 

(4) butterfat test, 

(5) pounds of milk in each class, 

(6) class prices, 

(7) gross amount for each class, 

(8) each deduction made by the handler or 
association of producers, 

(9) net amount paid. 

(k) Partial Payments. I'pon request, a partial 
payment shall he paid to a producer or an asso- 
ciation of producers not later than the last day 
of the delivery period for milk received during the 
first half of such delivery period. A producer's 
or association of producers' request for a partial 
payment shall be honored for an amount up to 
40 percent of the previous month's net utilization 
value computed to the nearest one hundred dol- 
lars ($100.00); provided, a sufficient volume of 
milk has been delivered for the first half of the 
month to justify such payment. Further, in de- 
term ing the amount of the partial payment to be 
made, the handler may take into account assign- 



ments and such other deductions as are author- 
ized by the producer or association of producers. 

A producer or an association of producers may 
request that a partial payment be made on a 
regular basis or may request a single or limited 
number of partial payments. In addition to the 
procedure outlined, a handler or an association 
of producers may make partial payments to a 
producer or an association of producers at such 
time or times and in such amounts as may be 
agreed upon between the two parties. 

(1) An association of producers or a business 
entity marketing milk on behalf of producers may 
reimburse handlers to whom they sell milk, or a 
processor may make a deduction from an indi- 



vidual producer from whom milk is purchased, 
for the following services and cost savings, if 
provided, at the rates listed: 

(1) field services - four cents ($0.04) per 
hundredweight, 

(2) testing for butterfat, bacteria and antibiot- 
ics three cents ($0.03) per 



ih 



(ii 



hundredweight, 

preparing and compiling receipts, payrolls, 

tiling reports and preparing checks - three 

cents ($0.03) per hundredweight, 

cost savings to an association or an indi- 



vidual producer resulting from the receiv- 
ing of milk on the basis of producer 
weights and tests - nine cents ($0.09) per 
hundredweight, 
(5) cost savings to an association or an indi- 
vidual producer resulting from receiving 
milk on a uniform basis - three cents 
($0.03) per hundredweight. 

Deductions defined in this Paragraph are 
not permitted on the volume of North 
Carolina baseholding producer milk sold 
as Class I or IA in packaged form in out 
of state markets. Deductions applicable 
to such sales are defined in Paragraph (m) 
of this Rule, 
(m) Deductions or credits permitted for out of 
state packaged sales. The commission, after 
considering the service charges in effect in such 
state or federal order area shall also announce a 
maximum deduction or credit which may be al- 
lowed. 

(n) Prior to receiving a reimbursement under 
( 1) of this Rule from an association of producers, 
or a business entity marketing milk on behalf of 
producers, a written contract containing the pro- 
visions specified in (o) of this Rule shall have 
been executed between such handler and an as- 
sociation of producers and a business entity 
marketing milk on behalf of producers. Such 
executed contract must be tiled with and ap- 
proved by the commission. 



NORTH CAROLINA REGISTER 



207 



PROPOSED RULES 



Prior to making a deduction from an individual 
producer by a handler, a written contract con- 
taining the provisions specified in (o) of this Rule 
shall have been executed between such handler 
and a producer. Such executed contract must 
be filed with and approved by the commission. 

The commission shall verify that the specified 
services and cost savings as contained in the 
contract are performed for the reimbursement 
made by an association of producers or for the 
deduction made from an individual producer. 

(o) l'he contract required in (n| of this Rule 
shall contain the following provisions and shall 
specify the method utilized for compensation for 
services performed, whether by deduction or re- 
imbursement: 



'AGREEMENT REGARDING 



PERFORMANCE OF 
AND COMPENSATION FOR COST 



SAVINGS 

( 1 ) It is agreed that (processor handler) will 
perform the following services for or effect 
the following cost saving s on behalf of 
(producer business entity marketing milk 
on behalf of producers); and that 
(producer business entity marketing milk 
on behalt of producers) agrees to com- 
pensate or reimburse (processor handler) 
for such sen ices and or cost savings at the 
following rates: 

cents per 



(A) field services - 
hundredweight. 



(B) testing for hutterfat, bacteria and anti 



biotics cents per hundredweight. 

(C) preparing and compiling receipts, pay- 



rolls, tiling reports and preparing check: 
cents per hundredweight. 
(D) cost savings to an association or an in- 
dividual producer resulting from the re- 
ceiving of milk on the basis of producer 
weights and tests cents per 

hundredweight, 



(2) 



(E) cost savings to an association or an in- 
dividual producer resulting from receiving 
milk on a uniform basis - cents 

per hundredweight. 

In no instance shall said services per- 
formed or cost savings so effected bv 
(processor handler) be compensated or 
reimbursed by (producer business entity 
marketing milk on behalf of producers) at 
a rate which exceeds those specified bv the 
North Carolina Milk Commission 4 
NCAC 7 .0512(1)." 



Statutory Authority G.S. 106-266.8(3) (7) (10); 

106-266.12. 



.0514 COMPUTATION OF MILK IN EACH 
CLASS 

(a) AM distributors t» the marketing afea shall 
compute the total pounds ef- milk m eaeh class 
a«4 apply te regular producer dolivorioo (includ 
hte distributor owned herds) fe* e ach d e livery 
period. AH classifi e d settlements with producers 
under the base plan shall be made m accordance 
with the uniform method &f allocating classes ef 
milk te- producers which ts as follows: 



Producer 
4- 
2 
1 

4 



15.000 

g QQ Q 

4000 

33.000 
(28,000) 



GfesI 



15.536 

»rh7S 

44400 



444*4- 
447 



siA 



Delivered 

1 8 ,000 

Q QQQ 

**ooo 

44400 
36,000 



Class 1 1 

4O04 



443 

444 



24400 



24400 



32.000 
(20,000) 
96.97° » 
103.57% 



44* obtain the ("lass I usage percent . divid e total 

^TtTXTTTT X r*TXTC^ ^T r lUl LCT (_' U 30 . 

Fk ample: 

32,000 divid e d by 33.000 equals 96.97% 

This percent should he applied t» each produc 
eM base; how e ver, we ft«4 that producer Xe-r 4 
4*4 Ret- deliver 96.07% ef hk base... (F81S 
pounds) which he is entitled te- » Class h 
Therefore, producer 4>re-r 4 is giv e n ah »f bis milk 

ITT ^S*ICC9C) T CTTTtT CT 1 1 \J Tl ' I'Ll L't? 1 1 ( ll tit? I I I UI *H t*t? I M*TT.ll I I(?U 

so that the 4-4>4$ pounds (ISIS - 44400 equals 
l.S IS) ef Class J mhk- may- he divided between 
the other producers. This is obtained by sub 
trading the pounds 4*>r 4 is given » Class I from 
the total Class 1- sales. 44*e base *rf 4-e-r 4 is 
subtracted from the total bas e s (Fxai 
- 40W equals 28,000). 
A new percentage is obtained by dividing 

ii^ii; 1 1 - i t - t- 1 t ,-it ■ 1 V-. ^ tli.i n.m- h ■ i . ■ . i f ■ a 1 ■ ■ 1 i 

1 IV " V ,'IU.'.' T TTTTTTr C t T 1 1 [C rTv^T I. *ll ,*V I V I Ul 1 

29,000 divided by 28,000 equals 103.57%). T4*s 

percent wih then apply to each producer s base 

(except thos e e liminat e d, as was producer jv&r 4-h 

44*e quantity obtained fof each producer will 

1 1 I ,jii 1^^ >t < g ( 1 - 1 .- .~ 1 mill- ■ i f-i . i t Vi ._i t .-\ t ■ ) I .\t ill ii til 

account fop the total Class I sales. Fxample: 



i i iino 

TTTTTrTTTT 



|Up 



208 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



4 444)00 * 103.57 ee«*ls 

2 &jm * 103.57%-qualo 

J i^QO * 103. 57 Equals 

4 5,000 * determined 

Total Class i 



15,536 pounds 

8,386 pounds 

5,178 pounds 

44300 pounds 

32,000 pounds 



Class JA sales ©f ©se is applied to producer's 
bases by the same procedure; that isy divide the 
feet aggregate bases obtained fof Class 4- mto the 
total Class 4A sales ©f ©se (Fxamplo: 2,000 th- 
v4ded by 28,000 equals 7.M%). 6aeh producer's 
base is multiplied by this percent to obtain bis 

j-~iil«1»-iti*\.- ■ ^ T 1 1 ■ 1 ■• ..• I \ in 1 II.- ,\ \ , • I \ r\ t t 1 1 ■ 1 l . . I 

as w-as producer >»©? 4r 



+ 15.000 * 7.11% 
3 £^£00 * 7.H% 
5. ^W s 7.1 l°u 
4 

fetelGte JA 



equals 
equals 
equals 



44474 
444 
44? 



pounds 
pounds 
pounds 



X^OO© pounds 



44*e Class J4 milk » determined by subtracting 
4>e Class I ami Class JA milk from the total tie- 
livenes ©f each producer. 

fb+ 44* compute the weight ©f product pounds 
to be classified i» each class, multiply the Fe- 
spective units by the proper weight factor deter 
mined ©«■ 4>e basis ©f the following w e ights peF 
quart: 



Product 

M4h 

Creamed Buttormilk( whole) 

Flavored 444k- ©f 444k- Drink( net ) 
ci-: m ~\ 1:11- 

'. 1 IT. 1 1 I I ! * I 1 1 IT 

Buttenriilk 



Product 

Cream (10 17%) 
Cream (18 21%) 
Cream (20 33%) 
Cream (33 39%) 
Cream ( ■ !() ' 12%) 



Weiglit 
P-eF Quart 

444 

444 

Weiglit 
P-ef Quart 
444 
444 

2 QQ 

2 Qg 

2.0 6 



44> compute the product pounds ©f eggnog, 
s©«f cream dips. ami milk shako h4*t multiply 
the units by the r e spectiv e weight toF each prod 
©ete provided, however, the w e iglit ©f a©y non 
milk ingredient solids may be deducted from the 
total weiglit ©f the computed product pounds to 
arriv e at the pounds to be classified to producers. 

/ f> . 1 I 1^ . .i 1 . \ i ■ l I f\ . \ 1 1 t -\ ■ 1 ^- . ^ T l^r-^^^4 »t~i ■ 1 I - . , i 1 . 1 V~. 1 - ,1 a .^l-> 

\ T~ J I 1 ITJ lUllil I'l.'UIIUJ \J I rTTTO TTTTTTT .1/ ITJ L* T CTTTTT 

11 1 '( 1 1 ( *t_i n >f 1 1 ii-1 t r*t* ERXt 'v VI i trO lit cr \i i ritt" 111 * HxH 1 1 1 tr 1 

to producers ©f breed milk (including 



distributor own e d herds) a©4 the remaining 
amount ©f milk delivered by brood producers (if 
any} shall be classified h* Class 44 ©f the regular 

norw ii. nn virt mi 1 if mljui m? ^l-.. .-.f..^,1 .«-i t K . ■ 

L. 1 U \J 1 . ^T Ttt^^^O r^m^ BCt^^TT iuv uiuyyii HJU ITT 1 1 It? 

regular pool, th« minimum premium ef twenty 
cents (SO. 20) per hundrodweiglit fof brood milk 
sales should be prorated to breed producers a* a 
perc e ntage e( their established base. 

(4) hi the months &f 4ah/ and January &f eaeh 
year, qualified brood producers may select the 

n rr*n v i mil k r>< >t^| ., \r 1 aa n ^1*1 i I "ir p j > ^^ 1 ua mlaj e*la 1 1 1 _i \ . 

L' I l-'^TJ I ULLir ^^^^^T ^^ l 111. 1 1 ^ E. LI IT. IT f*T?TTT tTT T^TTTtTT rl 1^ T 

w4h participate fof the following six month pe- 
Fied beginning August 4 afto I'obruary 4r (4to 
changes w+h be permitted between pools fof 
brood producers excopt m the months ef August 
a«4 Februar/ as provided » this Paragraph.) A 
copy e£ the agreement must be ftled- w-hh the 
plant and Milk Commission a«4 such agreement 
shall be i» writing afid signed by eaeh breed p*e- 
duc e r affected. 

fe^ 4e compute the plant less ef shrinkage for 
each month »f accounting period, the following 
procedure shall be followed: 

(4) Ad4 the weight ef ah mhk- ami cream 
products containing butterfat ef milk seh 
ids m any fonn received from producers 
©f other sources, a»4 4>e weiglit tof a«y 
volume ef milk r e constituted. 

Deduct from 4>e resulting total w e iglit 
computed » accordance with the above, 
4ie weiglit ef a«y cream, powder m- con 
dense received which is transferred directly 
fef «se i» the manufacture ef by products 
such as iee cr e am ami cottage choeso to 
determin e a sub total — -Net receipts to 
account fefr 

Add to this sub total the beginning bulk 
ami packago inventories to determine the 

tiit-il n-.iiiihf Q t t Vt . i r-fi til- nn.l t-v-< « I I - r^rr\ . 1 1 1,'tr 
l KJ 11^ TTn^TTT \J I 1 1 IT- rTTTTTT (IT TTT 1 1 111 It i ~ T. ^J Ut'tO 

to account fofr 
f4) Ad4 the weight ef ah milk, cream, ami 
milk products containing butterfat ami 
skim milk ingredients used ami disposed 
ef m the following manner: 

Packag e d ami buUc sal e s ami transf e rs 
(4s- m>t include animal feed sales); ending 
inventories; milk solids » reconstitution; 
the weight *4 aw unusual toss >v ; hich is 
allowable as provided fop m .0505(f) ©f 
this Section; transfers to 4>e manufactur 
ifig ©f by products such as iee cream ami 
cottag e cheese less the weight ©f- ingrodi 
eftts d e ducted m accordance w+th (e)(1) 
©f- this Rule, which wore purchased top 
direct «se m manufacturing by products. 
44>e transfer weights to manufacturing 
must be supported by complete ami ade- 
quate records. Such manufacturing Fe- 



NORTH CAROLINA REGISTER 



209 



PROPOSED RULES 



cords must be mado uvailablo fof 
inspection a«4 audit purposes, 

(4) Determine the allowable less »f shrinkage 
by multiplying the total w e ight ef the milk 
t*«4 milk products te account fof i» (o)(l) 
ef tfeis Rule, by three percent. 

H4 Determine the actual loss eF shrinkage &f 
gam by subtracting the total weights ac- 
counted fef ift (e)(2) ef this Rule h-ewt- the 
total weioht te account fof m- (o)( 1) ef this 

(4} When the actual less ef shrinkage oKceodii 
the three percent amount determined fo 
(c)(3) ef this Rule, the excess less ef 
shrinkage must be added te Class J- te 
produc e rs, except that tbe excess less ef 
shrinkage may be prorat e d based e» the 
source t4 «et receipts as computed fo the 
Ret sub total fo ( e )( 1 ) t»f this Rule. When 
the net receipts te account fo* te (o )( 1 ) ef 
tb+s Rul e includ e rec e ipts ef ingredients 
fro m sources other than producers e* 
from reconstitution, determine the percent 
that producer receipts afe te the sub total 
— net receipts te account fefr Apply this 
percent te ««y excessive less ef shrinkag e 
te determine the weight adjustment te be 
added te Class b Such adjustment shall 
be ea+4 fo the producer payroll fof the 
month following (be month h* which such 
less occurs, provided however, b enough 
Class H- milk is net availabl e then the 
amount net adjusted shall be paid i» the 
next subsequent month «* months until 
the fob adjustment » paid. 
(a) After each handler in the marketing area 
receives notification from the commission of the 
total pounds of milk m each class due for that 
'-■roup of producer'-, .ill handlers -ball compute 
the total pounds of milk in each class and apply 
to qualifying baseholding producer deliveries (in- 
cluding handler-owned herds) for each delivery 
period. All classified settlements with producers 
under the base plan shall be made iri accordance 
with the uniform method of allocating classes of 
milk to producers which is as follows: 



Producer 
]_ 
2 
3 

4 



Base 
15,000 

■s "I II! 

5.000 

5.000 

33.0(11) 

(28,000) 



Delivered 

is. ooo 

9.000 
6.000 
3,000 



5,178 822 

3.000 
32,000 4,000 

(29,000) 
96.97% 
103.57% 

To obtain the Class I usage percent, divide total 

Class I sales by total base. 

Example: 

32,000 divided by 33.000 = 96.97% 

This percentage shall be applied to each produc- 
er's base; however, producer number 4 did not 
deliver 96.97% of his base. Therefore, producer 
number 4 is given aH of his milk at Class I and a 
new percentage must be obtained so that the 
1.848 pounds (4.848 - 3.000 = 1,848) of Class 1 
milk will be reallocated to other producers. This 
is obtained bv subtracting the pounds number 4 
is given in Class I from the total Class I sales. 

1 he base of number 4 is subtracted from the total 
bases (Example: 33.000 - 5.000 = 28.000). 

A new percentage is obtained bv dividing the 
new Class I total by the new base total (Example: 
29.000 divided bv 28.000 ^_ 103.57%). This 
percent will then be applied to each producer's 
base (except those eliminated, as was producer 
number 4). 

The quantity obtained for each producer will 
then be his Class 1^ milk and the total of all will 
account for the total Class I sales. Example: 

1 15,000 x 103.57% = 15,536 pounds 

2 8.000 x 103.57% = 8.285 pounds 

3 5,000 x 103.57% = 5.178 pounds 

4 5,000 x determined 3,000 pounds 



Total Class I 



32,000 pounds 



The ("lass H milk h determined by subtracting 
the Class [ from the total deliveries of each pro- 
ducer. 



36.000 



(b) Exception. The method of allocating clas- 
sification outlined in (a| of this Rule shall apply 
to all producers, except that a cooperative asso- 
ciation of producers, mav petition the Milk 
Commission for approval of a different method 
of allocating classification to its members. Such 
petition shall include a complete copy of the 
method to be used and must demonstrate that 
all members of the association are treated 
equitably according to the plan or method of 
distribution applicable to such association. 



Class I 
15.536 
8.286 



Class II 

2.464 

714 



Statutory' Authority G.S. 106-266.8(3) (7 )( 10). 



.0515 FINANCIAL RESPONSIBILITY FOR 



210 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



MILK RECEIVED BY BULK TANKER 

A licensed milk distributor handler shall be fi- 
nancially responsible, as determined by such dis- 
tributor's handler's monthly utilization, for each 
producer's milk received from a farm bulk tank 
by the diotributor handler or its agent or em- 
ployee. In the absence of a written contract or 
agreement between the hauler and the producer 
(copy of which must be on file with the com- 
mission), a contract hauler or an independent 
hauler shall be deemed to be the agent of the 
diotributor; handler; provided, that any diotribu 
tef? handler, within 20 days after the 
promulgation of this Regulation (or within 10 
days after any contract is hereafter made with a 
hauler), may petition the commission for a hear- 
ing to determine whether the hauler is in fact the 
agent of the distributor. handler. Nothing 
herein contained shall prevent the diotributor (4} 

handler from requiring the hauler: 

(1) to obtain insurance, 

(2) to post bond, or 

(3) to agree to save the diotributor handler 
harmless from any loss in connection with 
the handling of said milk. 

But no such agreement shall relieve the diotribu 
tef handler from its liability to the producer in 
the event the hauler or his insurer fails to pay the 
producer for said loss. 

Where milk is received from a member produc- 
er's farm tank and transported to market by a 
producer cooperative association, which is net a 
licensed milk distributor the association shall be 
financially responsible to the producer for said 
milk until the milk is received by a licensed milk 
distributor, handler. 

Statutory Authority G.S. 106-266.8(3) (7 'J. 

.0516 USE AND ESTABLISHMENT OF 
CLASS I BASES 

(a) Producer bases shall be established eeeh 

yeaf t» accordance with the following rules: 

(4} Bas e Building Period. 44*e base building 

period shall be Septemb e r through De- 

cember each year, except fof aey group 

ef producers fof whom a- different baoo 

building p e riod has been approved by the 

Milk Commiooion. 44*e commiosion wtH-r 

however, gwe consideration te a different 

base building period proposed by asy (4} 

group ef producers provided ouch request 

is received by the commiooion at- least- 444 

months prior te the e ffectiv e date ef such 

proposed period. 

(3) D e termination ef Averag e Daily Buoeo. 

4e compute the average daily baooo, di- (4) 

vide the total pounds ef milk received by 



a distributor from e ach producer fof the 
baso forming periods m effect by the 
number ef days (from the fost day ef de- 
livory during such base building p e riod te 

^^q ^^A^L ^U ^g^^^^^^^^^\ hi i * n/ii liri' thfiw O 1 

EXZv lu Ji uuj iiiuiuui f \j j uui ^^ctt itow 1 1 KB i zF 1 

days. 4fos 91 day r e quirement dees He* 
apply te ft new producer establishing a 
base und e r the provisions set forth fof 
new producers bet applies efdy te e otab 
lished base holding producers whe ape eff 
the mark e t fop » p e riod ef tifse during the 
base building period. The base fof a 
producer whe dolivoro e» a» every othor 
day delivery schedule shell be computed 
by using the total numhor ef days fo the 
period calculated from the fost day ef de- 
livory ef such producer bet net less than 

Determination ef Baso aed Eotabliohing 

| ■ | > (_ii I iir i'i^ i i v i r \ i ' 1 \ *~ ~ \ i f 1 1 I l'" Vt ■ ■ pa trir 

1982 shall be computed m accordance 

'■'■<» * »"> ■."* fiiliif *r\ i-kfl'mt tit ♦ l-it-fc t irnn jaL 

* * 1 1 1 1 11IU 1 OIDD 11 1 V_ 1 1 \J\J I Lit L WTKI v^TTT^ V^T 

computation, eff e ctiv e with the compu 
tation ef bases fof 1983 aed fof sub so 
quent years, the average daily base fof 
each produoor shall be the simplo averago 

' * I * M- ^ ^^^^^^^T l"\ «~1 f J-t 1~\ r-K *-*1 , 1 *"1 J-l T* f l-| | 1 fjftjlj I '1 I ' , 1*- 

^TT 1 1 HL' UUII^ ULILAJ LUI 11WJ \J i lire OWttT sm 

age ullocutod te a producer fo accordance 
with the provisions outlined m this Sub 
section fof the three baoo building periods 
immediately precoding. 
fo aey year, the maximum amount ef 
commiosion base which eae be earned i» 
a given year by a producer under the threo 
yeaf moving p4a» is 44 percent uidoss a 
plant obtains approval from the commio 

^^^^^^ ^^i | [|H' >1 n^^'.! ^ Llitf fc >- «-N j-fc w r* 1 1 «-l 4 art.^ >»M , fc f 

U1U 1 1 TTT Ui 11 1UUIIUV CT rnt^nCT r^^T^^^TTTTTSW CTTTVF 

showing that more milk is needed fof its 

^Lni< x iii'h «-■'*■'-■ * » .-> f'4 «->-\ iu) l-» Q I 1 I | i , 1 «i f-i ♦ l^tm- 

rTTCCTTTT UUVI I 1 DQ UUUl 1 1 lULfl I * V ! 1 1 VVJ 1 rTTT TTl^^^P 

thee March 4- fof the following tatl base 
building period, othorwioo the above 
maximum will prevail. 
When the computation ef baso fof a pro 

I 1 I 1 I I IT rt\l lilt C >J3 A Kn>'.i Tnr < kfl n.-ivt i [aaj; 

u utvi i \j l_' u 1 1 u nrx cr i/Ujy rT7T exio i i u j i i t ullt 

t 1 :K I j--Vl j-nj -.mH i~ llS f fif ' ,mt ^1»- t li ..A .■>-*. i.-i tn,l 
TTTTiCTT L" mVWJ I T VT UllUl. Ill \J 1 1 1 IV L.TI T WH IV^^ 

percentage ef the base fof the previous 

^ : . t-t w thu jiaca i-in'^nni Inr -ill « t-» *-i-in i 'nair 

I t lil , 1 1 IV L'UJ^J IHOTOIT H_TI (til TTTTW T^TlI O 

shall be adjusted te 444 percent ef the 
specified percentage ef the bas e fof the 
previous year. 

Exception. This method ef establishing 
bases shall apply uniformly te all produc 
efs except such groups ef producers fof 
which a sp e cial base plae ef method ef 
e stablishing bases has been approved by 
the commission. 

Transfer ef Established Bases between 
Plants. A producer transferring from eee 



NORTH CAROLINA REGISTER 



211 



PROPOSED RULES 



plant to another shall have the right to 
transfer the base currently fo effect fof fos 
herd although At* base building p e n o da 
hw vafv between the tw*» plants. im- 
mediately upon transfer, the base building 
period fo eff e ct fof the plant to which a 
produc e r transfers shall be the base build 
mg period fof f . uoh produc e r. 
(fo I'iling fo Bases with Commission affo 
Notice to Individual Producers. Oft »f 
before the J 5th day- fo the month follow 
fog the effo fo the base building period 
each year, every distributor ' . hail foe wfob- 
the Milk Commission * complete record 
fo the name and- address fo each producer 
affo t-he base established fo accordance 
with the provisions as outlined. At the 
time fo foe fost payment under the new- 
base, ef prior thereto, each distributor 
■. hall notify e ach produc e r fo the daily 
bas e established, 
ffo I'stahlishment fo a Base fof a New Pro 
ducer. The establishment fo a bas e fof a new 
producer who ent e rs t*f ha* entered the market 
aft e r June -h- 1 Ofrl , affo who meets the qualifiea 
tions outlin e d m tfos Subsection sfofo be calcu 
luted under the following plan: 



hirst Month 
Second Month 

fotofo Month 



Fourth Month 



fof+h Month 



JfofofofifSf 

month deliveries 

foiforfo|fo4 

arfo s e cond month 

deliveries 

^fofofostr 

second atfo third 

month deliveries 

fofoifofofost 

fo«f months 

deliveries 



A daily average shall be computed by- dividing 
t-he deliveries by- the number fo days fo the pe- 
riod. Apply to this computed daily bas e the 
above percent which is applicable fo order to af- 
r+ve at the daily base which wfo apply for a paf- 
ticular month. Provided, howev e r, a base 
established fo accordance with the above plan 
shall net exce e d 3,000 pounds pef day- fof pro 
ducers who commence building base under tfos 
Rfoe aftef .-tone 1? Wfo 

4-he base established fof a Hew- producer under 
tfos Rule, shall be considered the base fof such 
producer until he ha* made further deliveries «h- 
def the following circumstances: 

(-14 fof a producer establishing base under the 
thr ee yeaf mosing average, the base built 
under the new- producer ffoe shall be 



consider e d the fost yeaf history. After 
making this computation, if- a producer 

<^^^^^^^^^ CAl ■!-''■' (A£ 1 1 1 I 1 f I ^ . ' i inii.i ♦!■-»,. r.inulif 

Bvu ' \- 1 -J " i Ull r •" O I 1 1 1 1. ' I V UUI 1 1 I E t^^T T"^??TXTTtT" 

base building p e riod the deliveries tfots 
mado shall be used to computo a second 
yeaf history which wfo be averaged wfob 
the history established fof the fost yeaf 

rt n a M idi La ca Fih.'tll rtMTVtm m -^fT,*.'* until 

1X1 1U O \Jl \- II I rtTIO L'l 1UII I VI 1 1U LIT 111 ^^^^^CT TTTTTTT 

the producer has d e livered through a foil 
base making period. After a producer has 
delivered through the ne*t foH- base mak 
fog period, the deliveries shall be used to 
determine the third yeaf history which wfo 
be averaged with the prior twe histories 
to d e t e rmin e the nest bas e fof such pro 
ducer. Ah' subsequent bases shall be 
computed fo accordance with the pro 
visions fo effect fof all other producers. 

(-fo ifof a producer shipping to a plant under 
a special base plan, the base computed 
under the new producer provision shall 
be considered the fost year history fof 
such producer an4 shall remain fo e ff e ct 
until such producer ships 0+ days of more 
during a regular base building period, after 
having mad e the computation fof the fost 
base. 3foe next bas e fof a producer under 
a special bas e plan shall be determined fo 
accordance with the provisions fo such 
plan. 

ffo 4fo qualify to build base under tfos pro 
vision, a producer must petition the com 
mission m- writing at least fo) days prior to 
the dat e he desires to commence building 
base affo provide information which wfo 
show that such producer has net been a 
base holder ef active pool participant e» 
any- market fof a period fofoS months affo 
that such producer during this fo> month 
period had less than tH*e percent owner 
ship, either directly ef indirectly, fH*f has 
been an officer ef director fo a oorpo 
ration, nef has bad- a debtor ef creditor 
relationship fo any- other dairy operation 
affo must further certify that the proposed 
new- operation is net fo cooperation with 
a previous base holder who could wet 
certify to the same circumstanc e s affo is 
net- fo anyway tied to a pres e nt Grad e A 
dairy operation. 

Should it be determined that a producer 
knowingly furnished incorrect ef fraud u 
lent information fo order to obtain ap- 
pro vaJ to build base, th e n the commission 
after review may r e vok e the base estab 
lished under this provision affo disquahty 
such producer from holding base under 
this Rule. 



212 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



After a produc e r has boon approved to 
build bas e und e r this provision, a pro 
ducer shall have the option ef d e signating 
the fost left month his shipm e nts are to 
be considered fof base building purposes. 

Should a producor wtoe is building base 
under the new produc e r ffoe purchase 
base, the base earned under too hw pro 

■ lii.-, if n i 1 , i ' i t tl^^ i ■ «-n /i ril.'h k^J u^_ t*\ t ir 
UULV I 1 LI IU HI 1 1 1\J RIZiO ['Ulll L.^J.-^-' TTT l.'UI 

chased shall be computed a«4 become toe 

base earned under foe Hew producer ftoe 

to which foe purchased base may be 

combined. The portion ef toe base 

earned shall be subject to toe 16 month 

limitation as specified to (0(1) ef this 

R«ler 

to) Transfer ef Base Holding Producers from 

Oth e r States. The commission wftl reeogni/e toe 

transfer ef bas e fof a producer to anoth e r state 

who wtft become a» active shipper to a North 

Carolina plant, provided, toe state fo which bis 

farm is located has a r e ciprocal agreement to ae- 

cept toe base ef a» existing North Carolina base 

L^^^^i^At ^ ^ 1 t j fc ^^^jr^^ ^^i > [l| t^ l ^^i ^ r vl LT J ^i 1 I \ I t ^^^^^^^^ 

(4} b-se ef Base Plan ef Exceptions. tofte pro 
ducer base plan as defined to tois Rul e shall be 
used by aft distributors a«4 producer groups to 
established marketing areas except where ae- 

I ~\ I ' t \ \ i j 1 1 i * I r "^■■t* U ^ i r T " 3 T ) I ' I ' I ^^^_ lX^^ ^^^^^1^^ I '^T"t ^iliii I l j \ ¥ h 

after formal reques t by producers ef a producer 
group to establish affo ese a different base plan 
ef a fall premium plan. (-Ae. application fof ese 
ef a different bas e plan ef toe faft premium plan 
must include a complete copy ef toe plan agreed 
upon by toe producers ef producer groups.) 

(e) Application ef Produc e r Bases. 4-he fol- 
lowing rules shall apply to toe bas e established 
fof each producer fof aft base plans . : 

(-44 Jtoe ef Average Daily Base fof Payment 
Purposes. AW plants shall ese toe daily 
average to. e ff e ct fof individual producers, 
multiplying tois average times the number 
ef days to a monthly payment period to 
determine toe bas e to be used fof each 
producer fof toe allocation to" classes ttof- 
H*g such payment period. 
(4) Adjustment ef Base during Payment P-e- 
riod. When a producer is eft" toe market 
during a period, toe bas e fof such pfe- 
duc e r shall be reduced by toe number ef 
days such producer is eft toe mark e t to 
order to determine toe base which wel be 
used fof ttos producer fof such paym e nt 
period. 
fe) A produc e r whe has established a base ift 

'|l)\, in 'ir l.-Lit ifiil ^f. n ■ n •i,-.'ii«'.1-iT-i.';i l l < i I i + l-» ■ 

uii i 1 1 111 1 RvTHIZ HI \-\x I it CXTTT^rorTTTT - ^^ TTTTTT I I IU 

for e going paragraphs ef tois R ul e shall 

ti,liii^ tl-.ii *"i ■-»!-> ♦ ♦ J-\ r/lt ■*» t ti riu'll 1^ •-! . - - -i li 1 i . i n 

IIUTV TTTv TTS^TTT I l_f mTTTTT ^'IILI I rTTTH tTTTvtt 



his daily deliveries ef mftk- afe transferred 
to another distributor within aey market 
fog area. A producor whe transfers from 
eee distributor to another distributor 
during a bas e forming period shall have 

'i * •■ t"> ■ i .- fi CAmAlllAU tr^tm V-» | r- ♦ j~\ f .i 1 sA ri I i i t. t »-.,-» f 

I IS -J WUI.IU */V IIIL'Ul DQ 11 Ulll 111LJ r^Tin OrTTTVnWT 

to both, ef aftr receiving distributors. 
(4^ A produc e r wfte bas established a base m 
a«y marketing afea shaft be e ntitled to 
continue to ship aft his fftftft to toe milk 
distributor where such base is established; 
provid e d, toat toe total Htoft production, 
less toat retained fof family ese^ is deliv 
efeft regularly a&4 meets toe requirements 

CM 1 II t^i 1 I "\J"1 I '■"■' ft'it:-> I'iiit ■) r\ ,-1 w.t, n ilnii,\ni- 

l* i 1 1 1\. rrmTT ui iu ,iluh- rix~vri u i in i LjiiUiLitiiTtiflT 

f§) Bases established eaeb yeaf shall be used 
fof allocating classes ef milk until Hew 
bases become eff e ctive. 
ff) Transfer ef Bases between Producers anft 

I j \ ■. . -' I \ I L/ ■ ■ .- ■ ■» A Knfii c- Vl '1 1 1 Vx ,-l ir\^liii,l /ir\li r t r~\ 

1S\J ^.TT \J 1 T!TOTTCrr I T UUJV JIlUn L'TJ LIT 't 'lit. U. 1 7 1 II ▼ tT_T 

deliveri e s ef milk by toe producer fof whose ae- 

1 ' I 1 1 1 Tl t 11 ^ I I L" I I : I "■' ''■'"' 7iir. \, 1 il)inr\ii t lm apjfl f.ininnii 
CTTCTrTT I I I I I IT * Tf 11 "J Ul_'ll f II V^J UU1 DCIcE 1 1 11. I'H.'L 1 11' TT I Til I E 

period, except toat bases »ay be transf e rred, ei- 
toef with ef without toe sale ef cattle, under toe 
following conditions: 

(to) When toe entiro bas e is se44 ef transferred 

to a singl e producor; ef 
(3) Wh e n a minimum ef i-QQ pounds ef daily 
base is selft ef transf e rred to a single pro 
duc e r; provided that when a producer's 
remaining base reaches a level ef less than 

I UU r U11UJ, UUl.ll L I U >.' U E7I IU.11 1 1 EC I 1 L'U t-^J 1 1 

■ 1 ■ 1 , I f , \, I \-t I ^~ l^ii.^ 'Hill «t-t •-! \ .- l^.-l .^ J"\ 1 . < f\ f -1 1~ | «~1 

- 1 1 v j v it w ^^^^ ^^^^^^^ t^^^^j ^^^^^^n ^^^r ^^^^^j ^^j rr ^^^^^^ 
CJU IT_' i , \J1 

I l J \\/ h,in ;i l^rtP& J .^ nnl,-j i n i n t 1 1 ; -itiil .■ 1 i.'li nMnt 

rTTT T T 1 TVT T CT T »lt'T\J r^ IIL'IU J \J 11 1 1 1 ■ HI IU C I IJ \J 1 1 J I J 1 1 1 1 

holding is terminated, the entiro base may 

TTf 1 1 111 I.TJVI 1 1-TJ T7T lirT ITJV.TJ C7v 1*1 Ul 1 1 1 1 If 1 1 1 II 1 1 

hold e rs according to the ownership ef toe 

(4} A bas e established by a new producer as 
provided fof to these rules shall net be 
transferable under toe conditions set forth 
to this Rule until the producor has boon 
a» activ e shipper fof 34 consecutive 
months from the tim e such producer be- 
ga» the establishment ef the base except 
to toe e vent ef total disability ef death ef 
the base holder. Should a producer who 
has established bas e under this provision 
discontinue shipping prior to beuig active 

rTTr J \3 I f lOI It 1 1*T, I rlCrf 1 tilt? T^IT't? nTr NTitTT 

producor shall e xpir e ; 
(-£) to aft cases ef transfer ef a»y base, the 
owner ef toe ease a«4 the person acquir 
m% bas e must certify to the commission 
as to the transaction He lat e r than -fo days 
following the effective date ef the transfer; 



NORTH CAROLINA REGISTER 



213 



PROPOSED RULES 



f6f Ah 1 such tfaasfefs shall be made ha the 
following inannt'r: 

(A) Transfer Dates. Bases seld r . hall be 
transferred effective the fifst day ef the 
month following the month i» which a 
transaction occur; . . (For example, ff a 
transaction occurs e+a the 1st daya, the 1 Oth 
ef atfth ef 44st ef a month, the effective 
date ef t ran ' iter wall be the fifst ef the fitt- 
lowmg month.) 

f44A I runsfcr ef Base 1 listory Base history 

l l ^ ■ | I 1 L^^i I g * * I I J I * *~*~ ■ fc | I i *\ tt^^ >- ' » ■ * i . fc t-\ rj \ r\jA r-4 % j~\ r\ 
LH 111 1 1 I 'V nnTrTTTTTTT ITT TTT^ TTTTTTCr T^TTTTTTTTTTTTT 

a* the "base m use" » transferred. 
fC-)- 1 'ransfer ef Production Credits. A 
producLT who purchases base shall be en- 
titled te h+* comparabl e part ef the seHefai 
production during the base building pe- 
riod aftd production credit ' , . wall be trans 
ferred aa the saint ' proportion a* the "base 
» use" is transferred; 
(4+ Retention ef ef I ess ef Rase. A producer 
who ha* an- established base, which is eli- 
gible f-ef transfer, shall be entitled te retain 
such base fiaf a period ef +8 months 
commencing e» the fifst day ef the month 
following the month dunng which the 
producer discontinues delivering milk te 
a (irade A milk plant subject te the pfe- 
visions a* outlined w- tba* Subsection. 
4f the base hi transleiTed during thi* 
1 8 month period. f-ef base computation 
purposes a base history watt be cr e at e d 
equal te the base i+a effect without r e gard 
a* te- whether the deliveries . ef the seller 
afe above ef below the bas e m- e ff e ct sub 
jert te- the following: 
During the fifst sis months ef the 



1 8 month period the fattl base af*4 the 
history created under th+* Paragraph f«ay 
be transf e rred. Commencing with the 
seventh month a base is r e tain e d the base 
held at+d the base history created at the 
time such producer became inactive watt 
be reduced by five percent. Commencing 
with the 44th month a base is r e tained the 
base held aad the base history created at 
the time such producer became inactive 
wall be reduced by aft additional five pef- 
cent faf a total reduction ef 44) percent. 

Should a producer fail te- transfer hi* 
base within the allotted time, then such 
base shall become a«41 and void. iVny 
producer w ho ha* cea -.e d te sh+p- Grad e 
A milk since December -b- 1073, shall be 
eligible te transfer base under the pfe- 
visions ef tb+* Paragraph. 44ae stipu 
lations outlined above shall be applicable 
te any producer now holding inactive base 



af>4 such producer shall have 4-8 months 
from the fifiae such producer eafit produc 
hag Grade A milk te- transfer base under 
the provisions ef th+s Subsection. 

4aae provisions ef this Subsection shall 
be applicable only te- a producer who dis- 
continues the shipment ef milk te a Grado 
A milk plant afaf shall Ret be applicable 
te- a producer who transfers , a part ef his 
base a«4 remains a* a» active shipper. 

Any base a«4 baso history transferred 
under the provisions ef- the previous inao 
t+ve base rules shall set be adjusted » ae- 
cordanco with this revi ^. ed Subsection; 
f&4 Exception. 44ae provisions outlined m t4a* 
Subsection ffa shall apply te all producers 
except where modified by the provisions 
e4 a special base plan approved by the 
commission; provided, however, a com 
plete ef partial transfer ef base shall be 

ii i 1 1 1 ; ■ ti ,t i-.ii.l * i »t . i ■ » w ■ i n 1 1 . -i i tnfl nucfl nilflc 
rTTTTT CTTTO TT'ftf (.II IUn III I T VT II IV TTCTT"^ t TJ (^^ 

if the seller ef bas e changes markets 
(pools . ) aftd- continues te ship milk te a«y 
Grad e A plant wherever located a«4 pa^ 
ticipates m- the Class f payoff ef such plant 
any- time within a^ months from the date 
ef the sale ef such base, unless tl+e seller 
ef bas e fifes a request with the commis 
s+e« aed- shows that he ha* purchased 

( T.I \_n^ IT." 1 \. ' l \ ' l \. I '\-i 30 FT" I I ^- 1 L TV I I " I I I !V 

i , 1 1 1 1 U-i. . i 1-^ . 1 1 , i ■ 1 1 ijiii 1 1 m 1 1 i \\ .• ■ 1 1 . i . ^ t- tli.i 

T^^^^cTT T^tTT^T rTTTTT C^v vTT^^ ^TTTT^T ^^T ^^TT^ ^^T TTT^T 

base held 44 months prior te- sale which 
evef »* high e r. Should a producer who is 
changing markets fi+ad it necessary te- Fe- 

tTTTt^* TTTt* TFtTTt? tTT ITITJ llilll\III5i I 1 (T I VI ,' 1 1 it? 

commission wall consid e r s . ituations such 
as retirement ef a partner, illness, ef other 
special considerations m determining the 
amount ef base that a producer must pe- 
acquire. Further, a distributor and or 
producer association licensed by the com 
mission shall not pool e-F permit a»y milk 
te share m- the Class 4 payoff which is pe- 
ceived &f purchased from a producer who 
has se!4 his bas e , until such producer is 
duly qualified te reenter the market ha tmy- 
pool as a bas e holder under the provisions 
outlined h* th+s Subsection. 
(g+ Ras e Hardships. Effective watfi the com 
put at ion ef bases which take effect e» a«4 after 
January fr 1U72, producers experiencing a less m 
base may receis e relief as provided ef may peti 
tie+> f-ef special consideration bas e d upon the 
provisions c* specifi e d: 

f+4 A producer who experiences a less ha 
pioduction during the base building pe- 
iae4 shall fa+t have his base reduc e d by 

f»i q «-. ^ * Vi ■ ■ n \ i\ ft.-\f.',i» * t }i ,^ 1 1 r >n l Vi'ir i.Ui ', 

invip rTTTTTT ttt i 'vi I'Pi 1 1 n iv" r r i t*t t v ili .' viv i i 



214 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



(3) 



m 



produoor experienc e s a toss to baoo, pfe- 
vidod the second oonsocutivo yeaf ouch a 
less is experienced this provision shall f*et 
apply. Whon a producer has ha4 his baoo 
calculated according to this provision, 
such producer is thon oligiblo to havo his 
has* calculated to accordance with- this 
provision again. 

Furth e r, this provision shall apply to all 
baso plans now to effect, provided there is 
»e provision to rebuild the base less ex- 
cept- as may be provided to plans now to 
effect. 

When a producer, whos e bas e is estab 
lished e» a three year moving average, has 
his current bas e computed under the pro 
visions el (g)( 1 ) ef this Rul e there shall 
be «e adjustment if* the base history top 

^^^^t^^t f Liu . i . 

Special request fof base adjustment may 
be made direct to toe Milk Commission 
wh e ther such less is above ef below 44} 
percent based upon the following eif- 
oumstancoo: 
(A) aets ef nature beyond the control ef 
operator ouch as lightning, floods, 
drought, less ef cattle dee to weather 



storm, power failure, electrocution, rabies, 
epidemic disease ef unusual occurrence, 

fftf d e ath ef serious illness ef the owner 



operator, ef a member ef the owner 
operator's family whoso service is essential 
m tlte dairy ' op e ration; 
(G) induction tote toe armed servic e s ef a 
member ef the owner operators family 
whoso service *s essential to toe dairy ep- 
oration. 
(4) Special request fof bas e adjustm e nts w-iff 
set be considered fef errors ef judgment 
to management an4 the normal hazards 
ef dairy fanning. 
fS) to the consideration ef aey- special request 
fof bas e adjustment, the commission may 
at its discretion fefef such request to a 
producer committe e ef the plant to which 
the petitioner ships with toe request that 
such committee review the petition fof 
adjustment afto make a recommendation 
to toe commission. Such requests may- 
be referred to the executivo committoo ef 
a» existing produc e r organisation ef faay- 
be referred to a sp e cial committ ee ap- 
pointed fof such purpose. 
(a) Milk supplied bv North Carolina base 
holding producers shall at all times be included 
in the highest classification before milk received 
from other sources is classified. No Class I or 



Class IA milk shall be purchased, received, han- 
dled or obtained from any sources other than 
North Carolina base holders without obligation 
to pay equalization payments unless it is estab- 
lished that North Carolina base holding milk is 
not available. 

(b) Producer bases shall be established in ac- 
cordance with the following rules: 

(1) Beginning Base. Effective (date to be the 
effective date of pooling regulations), the 
base for each North Carolina base holder 
for pooling purposes shall be the North 
Carolina Milk Commission base then in 
effect for a producer shipping on that day 
or the average of his daily production for 
the base months in effect for the plant or 
association to which such producer ships, 
whichever is greater. The base for a pro- 
ducer who has inactive base status, shall 
be the base held on (effective date of 
pooling regulations). The first recompu- 
tation of base after the effective date of the 
pooling regulations shall be January ' 
1989. 

(2) Effective (date to be effective date of 
pooling regulations), for each producer 
who regularly supplies milk or has a 
contractural obligation to supply milk to 
a North Carolina plant who does not hold 
a North Carolina base on such date, a 
base shall be calculated for pooling pur- 
poses for such producer regardless of 
where he lives, based on the average pro- 
duction for the four . previous months, or 
September through December 1987. 

(3) For any producer who enters the North 
Carolina market for pooling purposes af- 
ter (date to be effective date of pooling 
regulations), in order to qualify as a pool 
participant under Rule .0501(22), such 
producer must purchase base from an ex- 
isting producer, unless such producer 
meets the criteria for a new producer un- 
der (b)(1) of this Rule. 

(4) Base Building Period. The base building 
period shall be September through De- 
cember each year. 

(5) Determination of Average Daily Pro- 
duction. To compute the average daily 
production, divide the total pounds of 
milk delivered bv each producer for the 
base building period bv the number of 
days (from the first day of delivery during 
such base building period to the last day 
inclusive) but not less than 91 days. This 
91 day requirement docs not apply to a 
new producer establishing a base under 
the provisions set forth for new producers 



NORTH CAROLINA REGISTER 



215 



PROPOSED RULES 



(61 



121 



111 



(21 



hut applies only to established base hold- 
ing producers who are off the market for 
a period of time during the base building 
period, 

The average daily production for a pro- 
ducer w ho delivers on an every other day 
delivery schedule shall be computed using 
the total number of days in the period 
calculated from the first day of delivery of 
such producer but not less than 91 days. 
Total Base Requirements. The total daily 
base to be in effect shall be the daily av- 
erage of the Class I sales of the pool plants 
for the months of September. October 
and November of the previous calendar 
year plus 12%. 

Determination of Base for Subsequent 
Years, lor 19S9 and subsequent years, 
the total base requirements shall be deter- 
mined and this total base requirement 
shall be allocated to existing active base 
holders as a percentage of the previous 
years base provided the new base cannot 
exceed the average production for such 
producer during the base forming period. 
Anv base not allocated shall be reallocated 
to other producers who have additional 
production to cover such allocation. This 
allocation process shall be followed 
whether bases are increased or decreased. 



1961_ l and 



"1 he maximum loss provision contained 
in Paragraph (h)( 1 ) of this Rule applies 
after the computations are made tor indi- 
vidual producers. In the event of an in- 
crease, the maximum loss applies to the 
previous year's base. In the event of a 
decrease, the maximum loss applies after 
the decrease has been computed for an 
individual producer. 

On or about the fifth day of the second 
month following the end of each base pe- 
riod, the Executive Secretary' shall deter- 
mine and notify each producer of the 
amount of dailv market base earned dur- 
ing the base period. 

Base listing. Fach producers base shall 
be established only in the name(s) of the 
individual^) or in the corporate name of 
the owner(s) of the herd with which the 
base is earned and each handler shall re- 
port all deliveries and maintain all records 
relating to each producer's settlement in 
the n.iinei s i in v. Inch the b.ise is estabj 
lished. 



(c) Qualifications and Establishment of Base 
for a New Producer. 

( 1 ) Qualifications. The establishment of a 
base for a new producer who enters or has 



entered the market after June ]_, 
who meets the qualifications outlined in 
this Paragraph shall be calculated under 
the following plan: 



First Month 



No Base 



Second Month - 25% of the dailv 
average of first 
month's deliveries 

Third Month - 50% of the dai 



average of the first 
and second months' 
deliveries 
Fourth Month - 75% of the daily 

average of the first. 



Fifth Month 



second and third months' 

deliveries 

100% of the daily 



average of the first 
four months' deliveries 



The daily average shall be computed by 
dividing the deliveries bv the correspond- 
ing number of days of production. Apply 
to this computed dailv base the above 
percent which is applicable in order to ar- 
rive at the daily base which will apply for 
a particular month. Provided, however, 
a base established in accordance with the 
above plan shall not exceed 3,01)0 pounds 
per dav for producers who commence 
building base under this Rule alter June 
7, 1976. 

The base established for a new producer 
under this Rule, shall be considered the 
base for such producer until such pro- 
ducer delivers through a regular base 
building period. 
(2) Base for a New Producer. To qualify to 
build base under this provision, a pro- 
ducer must petition the commission in 
writing at least 30 davs prior to the date 
he desires to commence building base and 
provide information which will show that 
such producer has not been a base holder 
or active pool participant on anv market 
for a period of 36 months and that such 
producer during this 36 month period has 
less than one percent ownership, either 
directly or indirectly nor has been an offi- 
cer or director of a corporation, nor has 
had a debtor of creditor relationship in 
any other dairy operation and must fur- 
ther certify that the proposed new opera- 
tion is not in cooperation with a previous 
base holder who could not certify to the 
same circumstances and is not in anvwav 



tied to a present Grade A dairy operation. 



216 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



Should it be determined that a producer 
knowingly furnished incorrect or fraudu- 



lent information in order to obtain 



aj> 



proval to build base, then the commission 
after review may revoke the base estab- 
lished under this provision and disqualify 
such producer from holding base under 
this Rule. 

After a producer has been approved to 
build base under this provision, a pro- 
ducer shall have the option of designating 
the first full month his shipments are to 
be considered for base building purposes. 

Should a producer who is building base 
under the new producer rule purchase 
base, the base earned under the new pro- 
ducer rule at the time such base is pur- 



chased shall be computed and become the 
base earned under the new producer rule 
t£ which the purchased base may be 
combined. The portion of the base 
earned shall be subject to the 36 month 
limitation specified in (g)(4) of this Rule 
(d) I'se of Base or Base Plan. 
( 1 ) The producer base plan as defined in this 
Rule shall be the base plan used for 



pooling purposes and shall be used by all 
handlers, associations or marketing agents 
in settlement with producers. Any asso- 
ciation which wishes to settle with pro- 
ducers on bases computed under an 
association plan shall petition the com- 
mission for approval to settle with pro- 
ducers under a different base plan and 
shall tile such plan and computations with 
the commission. 



(2) Producers agreeing to have their milk 
marketed bv a marketing agent or who 
markets as individual producers to a han- 
dler shall participate in the North 
Carolina pool as individual producers and 
the base in effect or the base as adjusted 
in accordance with (e) of this Rule shall 
be used when making settlement with 
such producers, 
(e) Application of Producer Bases. The fol- 
lowing rules shall apply to the base established 
for each producer: 

( 1) Adjustment of Base during Payment Pe- 
riod. When a producer is off the market 
during a payment period because the milk 
of such producer does not meet the re- 
quirements of the local and state laws and 
regulations or fails to meet the handlers 
prepublishcd quality requirements, the 
base of such producer shall be reduced by 
the number of days such producer is off 
the market in order to determine the base 



which will be used for the producer for 
such payment period. 

(2) Use of Average Daily Base for Payment 
purposes. All handlers or associations of 
producers shall use the daily average base 
in effect for individual producers by 
multiplying this average times the number 
of days milk is included in a monthly 
payment period to determine the base to 
be used for each producer for the allo- 
cation of classes during such payment pe- 
riod. However, should the monthly base 
of any producer be gTeater than pro- 
duction, the monthly base shall be re- 
duced to equal the production for that 
producer prior to reporting his base to the 
pool for pool computations for that 
month. 

(3) A producer who has established a base in 
accordance with the requirements of this 
Rule shall have the right to retain such 
base when such producer transfers to an- 
other pool handler or association of pro- 
ducers. A producer who transfers from 
one pool handler or association of pro- 
ducers to another pool handler or associ- 
ation of producers during a base forming 
period shall have his base computed from 
his total deliveries to both, or all receiving 
handlers or association of producers. 

(4) A producer who [s not a member of an 
association and who has established a 
base as an independent producer shall be 
entitled to continue to ship all his milk to 
the handler where such base is established; 
provided, that the total milk production, 
less that retained for family use, is deliv- 
ered rcgularh and m eets the requirements 
of the local and state laws and regulations 
and meets the handlers prepublished 
quality requirements. 

(5) Bases established each year shall be used 
for allocating classes of milk until new 
bases become effective. 

(f) Transfer of Established Bases between 
Handlers and Associations of Producers. A 
producer transferring from one handler or an as- 
sociation of producers to another shall have the 
right to transfer the North Carolina base cur- 
rentlv in effect for his herd. 



(g) Transfer of Bases between Producers and 
Loss of Base. A base shall be applied only to 
deliveries of milk by the producer for whose ac- 
count milk was delivered during the base-forming 
period, except that bases may be transferred, ei- 
ther with or without the sale of cattle, under the 
following conditions: 



NORTH CAROLINA REGISTER 



217 



PROPOSED RULES 



( 1) When the entire base is sold or transferred 
to a single producer; or 

(2) When a minimum of 100 pounds of daily 
base is sold or transferred to a single pro- 
ducer; provided that when a producer's 
remaining base reaches a level of less than 
100 pounds, such base shall then be con- 
sidered his base and may be sold as a sin- 
gle lot; or 

(3) When a base is held jointly and such joint 
holding i^ terminated, the entire base may 
be transferred or divided between the joint 
holders according to the ownership of the 
base. 

(4) A base established by a new producer as 
provided lor in these rules shall not be 
transferable under the conditions set forth 
in this Rule until the producer has been 
an active shipper for 36 consecutive 
months from the time such producer be- 
gan the establishment of the base except 
in the event of total disability or death of 
the base holder. Should a producer who 
has established base unde: this provision 
discontinue shipping prior to being active 
for 36 months, then the base for such 



producer shall expire. 
In all cases of transfer of am 



(5| Inall 



base, the 



owner of the base and the person acquir- 
ing base must certify to the commission 
as to the transaction no later than 15 days 
following the effective date of the transfer. 
(6) All such transfers shall he made in the 
following manner: 



(A) Transfer Dates. 



Bases sold shall be 
transferred effective the first day of the 
month following the month in which a 
transaction occurs. (For example, if a 
transaction occurs on the 1st day, the 10th 
or 30th or 31st of a month, the effective 
date of transfer will be the first of the fol- 
lowing month.) 

(B) Transfer of Base History. Base history 
shall be transferred in the same proportion 
as the "base in use" is transferred. 

(C) Transfer of Production Credits. A 
producer who purchases base shall be en- 
titled to fus comparable part of the seller's 
production during the base building pe- 
riod and production credits will be trans- 
ferred in the same proportion as the "base 
m use" is transferred. 

(7) Retention of or 1 oss of Base. A producer 
who has an established base, which is eli- 
gible for transfer, shall be entitled to retain 
such base for a period of six months 
commencing on [he first day of the month 
following the month during which the 



producer discontinues delivering milk to 
a Grade A milk plant subject to the pro- 
visions as outlined in this Paragraph. 

If the base is transferred during this six 
month period, for base computation pur- 
poses a base history will be created equal 
to the base in effect without regard as to 
whether the deliveries of the seller are 
above or below the base in effect. 



Should a producer fail to transfer his 
base within the allotted time, then such 
base shall become null and void unless h 
is substantiated by written authorization 
from the courts that such base is involved 
in an estate settlement. The stipulations 
outlined above shall be applicable to any 
producer now holding inactive base and 
such producer shall have six months from 
(date to be effective date of pooling regu- 
lations), to transfer base under the pro- 
visions of this Paragraph. 

The provisions of this Paragraph shall 
be applicable only to a producer who dis- 
continues the shipment of milk to a Grade 
A milk handler or association of produc- 
ers and shall not be applicable to a pro- 
ducer who transfers a part of his base and 
remains as an active shipper. 

Any base and base history transferred 
under the provisions of the previous inac- 
tive base rules shall not be adjusted m ac- 
cordance with this revised Paragraph. 
(8) Hxception. The provisions outlined in this 
Paragraph (g) shall apply to all producers 
provided, however, a complete or partial 
Transfer of base shall be null and void un- 
der any of the base rules if the seller of 



base changes markets (pools) and contin- 
ues to ship milk to any Grade A handler 



or association of producers w hcicvcr lo- 
cated and participates in the Class I payoff 
of such handler or association of produc- 
ers anytime within 36 months from the 
date of the sale of such base, unless the 
seller of base files a request with the 
commission and shows that he has pur- 
chased base to restore base to the level of 
t he total base held at the time of sale or 
months prior to sale 



the base held 36 
whichever is higher. 



pnor to 
Should a pioduccr 
who is changing markets find it necessary 
to reduce the size of his milking herd, the 
commission will consider situations such 
as retirement of a partner, illness, or other 
special considerations in determining the 
amount of base that a producer must re- 
acquire, further, a handler and or pro- 
ducer association licensed bv the 



218 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



commission shall not pool or permit any 
milk to share in the Class I payoff which 
is received or purchased from a producer 
who has sold his base, until such producer 
is duly qualified to reenter the market in 
any pool as a base holder under the pro- 
visions outlined in this Paragraph, 
(h) Base Hardships. Effective with the com- 
putation of bases which take effect on and after 
January J^ 1972, producers experiencing a loss in 
base may receive relief as provided or may peti- 
tion for special consideration based upon the 
provisions as specified: 

( 1) A producer who experiences a loss in 
production during the base building pe- 
riod shall not have his base reduced by 
more than ten percent the first year such 
producer experiences a loss in base, pro- 
vided the second consecutive year such a 
loss is experienced this provision shall not 
apply. When a producer has had his base 
calculated according to this provision, 
such producer is then eligible to have his 
base calculated in accordance with this 
provision again. 

Special requests for base adjustment may 
he made direct to the Milk Commission 
whether such loss is above or below ten 
percent based upon the following circum- 
stances: 
(A) acts of nature beyond the control of 
operator such as lightning, floods, 
drought, loss of cattle due to weather, 
storm, power failure, electrocution, rabies, 



01 



epidemic disease of unusual occurrence, 
fire, etc.; 

(B) death or serious illness of the owner- 
operator, or a member of the owner- 
operator's family whose service is essential 
in the dairy operation; 

(C) induction into the armed services of a 
member of the owner-operator's family 
whose service is essential in the dairy op- 
eration. 

(3) Special requests for base adjustments will 
not be considered for errors of judgement 
in management and the normal hazards 
of dairy fanning. 

(4) In the consideration of any special request 
for base adjustment, the commission may 
at its discretion refer such request to a 
producer committee of the association of 
producers or processor to which the 
petitioner ships with the request that such 
committee review the petition for adjust- 
ment and make a recommendation to the 
commission. Such requests may be re- 
ferred to the executive committee of an 



existing producer organization or may be 
referred to a special committee appointed 
for such purpose. 

Statutory Authority G.S. 106-266.8(3) (7). 

.0517 PLANT RECORDS AND INSPECTION 
OF RECORDS 

(a) Books and Records to be Maintained. 
Each distributor handler, association of produc- 
ers and marketing agent shall at all times keep 
such "Books and Records" as will enable the 
commission or its designated representative to 
determine accurately all receipts, sales, transfers, 
production, and bottling records, use and dispo- 
sition of all milk and milk products in accordance 
with the authority vested in said commission. 
These records shall include detailed producer 
payroll records showing total producer receipts, 
butterfat test, classification, and payment by 
classes, gross amount, all deductions, and charges 
and net payment, and a copy of computations 
used in arriving at classes and allocations of 
classes to producers. These records shall show 
the source and quantity of all other milk, cream, 
condensed or powdered milk. The sales records 
must include the sales by units, the value of each 
group of units, showing retail and wholesale sales 
by daily transactions, summarized into a monthly 
total. A detailed record shall show all transfers 
of bottled or bulk products sold to other distrib 
utors handlers or buyers. 

(&) Reports to be Filed. Each distributor shall 

t l t m i, t-i t . \ 4 1-^.1 i-» .-» rt-i »->-i « l- f- ■ i i n t-i;-.) 1 'it.ir fKnn tii^ I V \ 1 Y 

I TIT n I . II 1 TTT I 1 IV CTTTTTTTTTtTTtTTTTT TTTTT III I VI cTTTCTT lilt.' I '.'III 

4ay »f ouch month e« forms furnished by tbe 
commission a detailed record showing the total 
receipts ef milk from producers an4 other 
sources, all sales, transfers, «se a»4 disposition 
ef H«lk- handled m the pr e vious month. Such 
reports shall show the receipts by classes, 
butterfat differentials, total dollars paid te- each 
producer a«4 total quantity ©f- dairy products 
manufactured. This report shall includ e a com 
plete accounting fof aU milk received from pro 
ducers a«4 other sourc e s eaeh- month. T4*e 
information reported must be compiled from Fe- 
oords ef a permanent nature a«4 kept e« file by 
the distributor. 
fs} (b) Inspection of Records. The procedure 
regarding the production of records by milk d+s- 
tributors handlers or associations of producers 
for examination by representatives of the Com- 
mission is as follows: 

(1) All licensees will be notified of the names 
of Milk Commission auditors and inves- 
tigators authorized to examine distribu 
tor's handlers' or associations of 
producers' records. 



NORTH CAROLINA REGISTER 



219 



PROPOSED RULES 



(2) Each licensee shall notify the Milk Com- 
mission of the persons at each location 
having custody of and authorization to 
provide all records to representatives of 
the Milk Commission. These persons 
must be normally available since no prior 
notice of the investigation will be given. 

(3) All records shall be made available for the 
representative's examination upon his re- 
quest. Such records may include, but are 
not restricted to, the profit and loss or 
operating statement, ledgers, and sup- 
porting information such as invoices, 
vouchers, and any other records or docu- 
ments necessary to verify entries made in 
the distributor's handler's or an associ- 
ation of producers profit and loss or op- 
erating statement. 

(4) Representatives will maintain the 
confidentiality of all records examined. 
Information which is not related to the 
purpose of the investigation or examina- 
tion will not be recorded, nor will any in- 
formation which might reflect the profit 
or loss or financial condition of a plant 
or company be copied. 

(5) Y\Tien the profit and loss or operating 
statement is examined, the Milk Com- 
mission representatives, prior to the ex- 
amination of the statement, will select at 
least two expense categories in each 
month or accounting period which may 
be blocked out along with the net profit 
figure for such month or accounting pe- 
riod, in order that the net profit or loss for 
such month or accounting period may not 
be ascertained in later computations. The 
accounts approved for blocking out may 
vary from month to month at the dis- 
cretion of the representatives. 

(6) The custodian of the records may be 
present when the profit and loss or oper- 
ating statement is being examined. 

Statutory Authority G.S. 106-266.8(5), (7), 
(12), (14). 

TITLE 10 - DEPARTMENT OF HUMAN 
RESOURCES 



1 he public hearing will be conducted at 1:30 
p.m. on July 18, 1988 at Archdale Building, 
Hearing Room (ground floor), 512 Sorth 
Salisbury Street, Raleigh, North Carolina. 

Comment Procedures: Any person may request 
information or copies of the proposed rules by 
writing or calling John P. Barkley, Agency Legal 
Specialist, Division of Health Services, P.O. Box 
2091, Raleigh, North Carolina 27602-2091, (919) 
733-3134. Written comments on these rule 
changes may be sent to Mr. Barkley at the above 
address. Written and oral comments (no more 
than ten minutes for oral) on these rule changes 
may be presented at the public hearing. Notice 
should be given to Mr. Barkley at least three days 
prior to the public hearing if you desire to speak. 

CHAPTER 8 - HEALTH: PERSONAL HEALTH 

SLBCHAPTER 8C - M TRITION AND DIETARY 
SERVICES 

SECTION .0900 - YVIC PROGRAM FOOD 
PACKAGE 

.0901 ALLOWABLE FOODS 

(b) The following exclusions from the food 
package have been adopted by the North 
Carolina WIC program and approved by the 
L nited States Department of Agriculture, food 
and nutrition service: 

(3) eggs other than grade A large or extra large 

fresh eggs; 
(8) all formulas other than standard milk- 
based iron fortified infant formulas, unless 
the WIC program contracts for a specific 
formula that will be listed on the WIC 
food in>trument, or unless a physician 
prescribes the a formula and documents 
the presence of a specific set- ef medical 
conditions condition, fulfilling WIC pro 
gram r e quirements fof provision e£ the 
reason for the specific formula prescribed, 
and the duration of its use; The conditions 
which must be met- te- allow «*e »f ouch 
type ef formula shall be set- forth i» the 
North Carolina W I C Prouram Manual; 



lyotice is hereby given in accordance with G.S. 
150B-12 that the Division of Health Sen-ices in- 
tends to amend regulations cited as 10 NCAC 8C 
.0901, .1106, and. 1204. 

1 he proposed effective date of this action is Oc- 
tober 1, 1988. 



Statutory Authority G.S. 130A-361. 

SECTION .1100 - WIC PROGRAM FOOD DIS- 
TRIBLTION SYSTEM 

.1 106 ALTHORIZED WIC VENDORS 

(b) In order to participate in the WIC program, 
the vendor shall: 



220 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



(4) Enter in the "Pay Exactly" box on the 
food instrument only the total amount of 
the current prices, or less than the current 
prices, for the eligible food items provided 
and shall not charge or collect sales taxes 
for the eligible items provided; 
(16) Maintain a minimum inventory of eligi- 
ble food items in the store for purchase 
by WIC Program participants. All such 
foods munt shall be within the manufac- 
turer's expiration date. The following 
items and sizes constitute the minimum 
inventory of eligible food items for stores 
classified 1 - 4: 

Food Item 

Milk 



-and- 
Skim/lowfat fluid: 
gallon or half gallon 
Nonfat dry: quart 
package 

-or- 
Evaporated: 12 oz. 
can 

2 types 

4 types (minimum 
box size 7 oz.) 
Grade A, large or 
extra-large: white 
or brown 

Orange juice must be 
available in 2 types. 
A second flavor must 
be available in 1 
type. The types are: 
12 oz. frozen, 46 oz. 
can, 64 oz. container 



Cheese 
Cereals 

Eggs 



Juices 



2 types 

2 juices; 4.2 oz. 

jars 

2 cereal grains; 

8-oz. boxes (one 

must be rice) 

2 types; 

or 1 type contracted 
for by the WIC program 
and designated on 
the food instrument; 
13-oz. concentrate 

Quantities Required 



Dried Peas 
and Beans 
Infant 
Fruit Juice 
Infant 
Cereal 



Total of 6 gallons 
fluid milk 



Total of 5 quarts 
when reconstituted 



Infant 
Formula 



Total of 6 pounds 
Total of 12 boxes 

6 dozen 



Type of Inventory 
Whole fluid: gallon 
and half gallon 



6 of each type 
in stock 



NORTH CAROLINA REGISTER 



221 



PROPOSED RULES 



3 one-pound bags 
30 jars 

6 boxes 



62 cans 



For store classification 5, the following applies: 
Supply within 48 hours of verbal request by local 
WIC agency staff any of the following products: 
Nutramigen, Portagen, Pregestimil, Similac Spe- 
cial Care 24, Similac 6040, Similac (Low-Iron), 
Enfamil (Low-Iron), SMA Low Iron, Ensure, 
Ensure Plus, Osmolite, Sustacal HC, Sustacal, 
Isocal, Enrich, and Lnfamil Premature Formula. 
All vendors (classifications 1 through 5) shall 
supply milk or soy based, 32 oz. ready-to-feed 
or powdered infant formula upon request. 

(27) Not be employed, bv 4*? '. tot e t*F local 
WIC program or have a spouse, child, »f 
parent or sibling who is employed by the 
state or local WIC program, and not have 
an employee who is employed, or has a 
spouse, child, parent or sibling who is 
employed hv the state or local WIC pro- 
gram. For purposes of the preceding 
sentence, the term "vendor" means a sole 
proprietorship, partnership, corporation, 
other legal entity, and any person who 
owns or controls more than a ten percent 
interest in the partnership, corporation, 
or other legal entity. 
[29] Not charge or collect sales taxes for the 
eligible items provided. 
(e) An authorized WIC vendor may be dis- 
qualified from the WIC program for violation of 
10 NCAC SC .1106(b) or violation of any other 
state and federal WIC program rules for a period 
not to exceed three years. A» authoriz e d WIC 
vendor '. hull be disqualified from tbe WIC Pro 
gram upon disqualification from another I'SDA. 
ENS Program U*t a period fh**- to oKcoe - d that- »f 
tbe other disqualif i cation. 44** authoriz e d WIC 
vendor shall be givi » n 44 days written notice? ef 
af¥r adverse action which affects tm participation 
» t4+e WIC program. 44*e vendor app e als pro- 
c e dur e shall be » accordance with 444 NCAC S*S 
. 1200. WTien a vendor commits a violation of 
the WIC program rules, he will be assessed 
sanction points as set forth below: 



(1) 2.5 points; stocking WIC approved foods 
outside of manufacturer's expiration date; 

(2) 5 points: 

(A) failure to attend annual vendor training: 

(B) failure to submit price reports twice a 
year or within seven days of request by 
agency; 

(C) requiring participants to purchase spe- 
cific brands when more than one 
WIC-approved brand is available; 

(D) providing unauthonzed foods (as listed 
in the vendor agreement); 

(E) allowing substitutions for foods listed 
on WIC food instruments ); 

(F) failure to stock minimum inventory. 

(3) 7.5 points: 

(A) failure to properly redeem (e.g., not 
completing date and purchase price on 
WIC food instrument(s) before obtaining 
participant's signature); 

(B) discrimination (separate WIC lines, de- 
nying trading stamps, etc.); 

(C) issuing rainchecks; 

(D) requiring cash purchases to redeem 
WIC food instrument! s): 



till 



contacting WIC participants in an at- 
reeoup funds for food 



tempt to 
instruments 



(4) 15 points: 

(A) charging more than current shelf price 
for WIC-approved foods: 

(B) charging for foods in excess of those 
listed on WIC food instrument s): 

(C) failure to allow monitoring of store by 



WIC staff when required: 
(D) failure to provide 



WIC food 



mstrument(s) for review when requested; 

(E) failure to provide store inventory re- 
cords when requested by WIC staff; 

(F) nonpayment of a claim made by state 
agency; 

(G) sending for payment any food 
mstrument(s) accepted by anv other store: 

(H) intentionally providing false informa- 
tion on vendor records (application, price 
list. WIC food instrument s), monitoring 
forms). 

(5) 20 points: 

( A ) providing cash credit for WIC food 
instniment(s): 

(B) providing non-food items or alcoholic 
beverages for WIC food instrument(s); 

(C) charging for food not r eceived by the 
WIC participant. 

(6) Once a vendor accumulates 15 points, he 
is subject to disqualification. All earned 
points are retained on the vendor file for 
a period of one year or until the vendor 



in 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



is disqualified as a result of those points. 
If a vendor commits a violation within six 
months of reauthorization after a disqual- 
ification period, ten points in addition to 
those earned from the violation will be 
assigned; if after six months, but within 
one year of the reauthorization date after 
a disqualification period, five points in 
addition to those earned from the vio- 
lation will be assigned. 



(7) The period of disqualification is deter- 
mined by the nature of the violation(s), 
the number of violations and past disqu- 
alifications. The formula used to calculate 
the vendor's disqualification period is^ 
number of points of the worst offense 
multiplied hv IS daw .Additional points 
totalling above ]_5 will be multiplied by 
18 days and added to the disqualification 
period. 

(f) Notwithstanding Paragraph (e) of this Rule, 
an authorized W1C vendor shall be disqualified 
from the W 1 C." program upon disqualification 
from another I SPA, FNS Program for a period 
not to exceed that of the other disqualification. 

(g) 1 he authorized WIC vendor shall be given 
15 days written notice of any adverse action 
which affects his participation in the WIC pro- 
gram . The vendor appeals procedure shall be in 
accordance with 10 NCAC 8C .1200. 



(I) (_h| I he state agency reserves the right to set 
off payments to an authorized vendor if the ven- 
dor fails to reimburse the state agency in accord- 
ance with Subparagraph(b)(23) of this Rule. 

£g) (i) North Carolina's procedures for dealing 
with abuse of the WIC program by authorized 
WIC vendors do not exclude or replace any 
criminal or civil sanctions or other remedies that 
may be applicable under any federal and state 
law. Neither the vendor nor the state is under 
any obligation to renew this contract. 
Nonrenewal of a vendor contract is not an 
appealable action. If a contract is not renewed, 
the person may reapply and if denied, may appeal 
the denial. 

{&f (]) Notwithstanding other provisions of this 
Rule, for the purpose of providing a one-time 
payment for WIC food instruments accepted by 
a non-authorized WIC vendor, a current WIC 
vendor agreement need only be signed by the 
vendor and the state agency. The vendor may 
request such one-time payment directly from the 
state agency. The vendor shall sign a statement 
indicating that he has provided foods as pre- 
scribed on the food instrument, charged current 
shelf prices and verified the identity of the par- 
ticipant. For the purposes of effecting such a 



WIC vendor agreement, the vendor is exempt 
from the inventory requirement and the require- 
ment for an on-site visit by the local WIC 
agency. Any WIC vendor agreement entered 
into in this manner shall automatically terminate 
upon payment of the food instrument in ques- 
tion. 

Statutory Authority G.S. I30A-36I. 

SECTION .1200 - WIC PROGRAM 
ADMINISTRATIVE APPEALS 

.1204 NOTIFICATION OF THE RIGHT TO 
AN ADMINISTRATIVE APPEAL 

(b) A local WIC agency or potential local WIC 
agency shall be given M 60 days notice of any 
adverse action which affects its participation in 
the WIC program. 

Statutory Authority G.S. 130A-361. 

****************** 



1\ otice is hereby given in accordance with G.S. 
I SOB- 1 2 that the Division of Health Services in- 
tends to amend regulations cited as 10 NCAC 10 A 
.2115, .2121, .2122, .2123. .2124. .2/26, .2127, 
.2128, .2129, .2130, .2131, .2132; and repeal reg- 
ulations cited as 10A .2/17, .2120. 

1 he proposed effective date of this action is 
January 1, 1989. 

1 he public hearing will be conducted at 1:30 
p.m. on August 17, 1988 at Archdale Bui/ding, 
Hearing Room (ground floor), 512 North 
Salisbury Street, Raleigh, North Carolina. 

\_/Omment Procedures: Any person may request 
information or copies of the proposed rules by 
writing or calling John P. Barkley, Agency Legal 
Specialist, Division of Health Services, P.O. Box 
2091, Raleigh, North Carolina 27602-2091, (919) 
733-3134. Written comments on these rule 
changes may be sent to Mr. Barkley at the above 
address. Written and oral (for no more than ten 
minutes) comments on these rule changes may be 
presented at the public hearing. Notice should be 
gtien to Mr. Barkley at least three days prior to 
the public hearing if you desire to speak. 

CHAPTER 10 - HEALTH SERVICES: 
ENVIRONMENTAL HEALTH 

SUBCHAPTER 10A - SANITATION 



NORTH CAROLINA REGISTER 



223 



PROPOSED RULES 



SECTION .2100 - RULES GOVERNING THE 

SANITATION AND SAFETY OF MIGRANT 

HOUSING 

.2115 PERMITS 

(a) A completed application for a permit for 
migrant housing shall be made to the appropriate 
local health department at least 30 days prior to 
the proposed time of occupancy. 

(b) No permit to operate migrant housing shall 
be issued until an inspection of the migrant 
housing is conducted by the division and it has 
been determined that the migrant housing is in 
compliance with all the requirements of these 
Rules. The inspection will be made within 30 
days after receipt of the completed application. 

(c) A permit to operate migrant housing will 
be valid until December 3 1 of the current calen- 
dar year unless it is revoked. t*F canceled. 

(d) A permit may be revoked in accordance 
with G.S. 130A-23 when a violation exists which 
may be harmful to the health or safety of the 
migrants. A permit shall be revoked in accord- 
ance with G.S. 130A-23 upon receipt of a sani- 
tation classification of disapproved. When a 
permit has been revoked, the migrant housing 
operator may apply for a new permit and the di- 
vision will reinspect the migrant housing within 
a reasonable time after receipt of the application, 
but not more than a period of 30 days. No new 
permit shall be issued until the migrant housing 
has been reinspected and found to comply with 
the rules of this Section. 

(e) No person shall occupy or cause to be oc- 
cupied any migrant housing until a valid permit 
is posted at the site of the migrant housing. In 
interpreting this requirement, a permit shall be 
required when 1 3 or more migrants are housed 
on tjie same tract of land or contiguous tracts of 
land and the housing is controlled hv the same 
migrant housing operator. 

(f) A person whose permit is denied suspended, 
or revoked mav appeal that decision in accord- 
ance with G.S. 15013 and 10 NCAC IB. 

Statutory Authority G.S. 130A-239. 

.2117 REINSPECTIONS (REPEALED) 
Statutory Authority G.S. I30A-239. 

.2120 PLAN REVIEW (REPEALED) 

Statutory Authority G.S. J30A-239. 

.2121 SITE 

(a) AH- sit e s used fof migrant housing shall be 
adequately drained. 4^he housing shall be locat e d 
so that drainage from a«4 through the housing 



»fet* will Het endanger a»y domestic e* public 
wat e r supply of interfer e with the prope'r func 
tioning el sanitary sewage cyct e mo. All sites shall 
be graded and ditched, if needed, in order to 
render them reasonably free from depressions in 
which water may collect and become a health 
hazard. 

(b) The grounds and open areas surrounding 
the buildings shall be maintained in a clean and 
sanitary condition free from rubbish, debris, 
waste paper, garbage, refuse, and other solid or 
liquid waste, by- the migrant housing operator, 
crow leader, aftd migrants. 

(c) Migrant housing buildings in which food is 
prepared and served or where sleeping quarters 
are located shall be at least 300 feet from any li- 
vestock quartering areas under the migrant 
housing operator's control. 

Statutory Authority G.S. 130A-239. 

.2122 Bill. DINGS 

(a) Even' building shall be constructed in a 
manner which will provide protection against the 
elements. 

(b) Excluding closet floor space, each Each 
room used for sleeping purposes shall contain at 
least 50 square feet of floor space for each occu- 
pant except for children two years of age or 
younger sleeping in the same room with their 
parent or parents. 

(f \ \ i I I > ' ■ - * *i entlflO 4 i i j x t f.idin.i .■ ri - i 1 1 Vx. i nrnfi/Lwl 
v. ( nr i l u j i er ,n. nil i v.,n.' i oonnic ttttttt i_*\j l'iu f iliv. *_i 

m aH buildings except manufactured housing. 
Except in manufactured housing, no floor space 
where the ceiling height is less than seven feet 
shall be counted towards minimum square foo- 
tage requirements for rooms used for sleeping 
purposes. 

(d) Beds, cots, ef bunks, an4 suitable storage 
facilities, such as wall lockers fof clothing a«4 
personal articl e s, fof each occupant, shall be 
provided m ev e ry room «*ed fof sleeping p«f- 
posoo. Such beds e* similar facilities shall be 
spaced r©+ closer than 36 inches, both laterally 

ill tCl ^Tlx.1 fc IJ trlttT , CTTTTT M lilt I T*t? (?1 T? T Tl t <?V-i LT+ it?lt*^ 1 B 

inches from the floor. If double deck bunks afe 
used, they- shall be spaced wot less than 4& inches, 
both laterally aftd e»4 t» efttb 44*e minimum 
clear space b e tw ee n the low e r a«4 upper bunk 
shall be ftot led* than H inches. Triple deck 
bunks a*e prohibited. A bed, cot, or bunk for 
each occupant shall be provided in a room used 
for sleeping purposes. 

(e) The tloors of each building shall be con- 
structed of wood, concrete, or other suitable 
material. Eloors shall be of smooth and tight 
construction. The walls and ceilings shall be of 
durable construction, and the floors, walls, and 



224 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



ceilings shall be kept clean and in good repair, 
by the migrant housing operator, crow l e ader, 
a«4 the migrants. 

(f) Wooden floors and floors of fabricated ma- 
terial shall be elevated at all points to prevent 
dampness and to permit free circulation of air. 

(g) Fach room in a migrant Migrant housing 
building shall be provided with screened windows 
the total area of which shall be not less than 
one-tenth of the floor area m of each room, ex- 
cluding closet space. A window shall be an 
opening to the outside, excluding including doors 
provided with screens, that can be closed to pro- 
tect against the elements. At least one-half of 
each window shall be so constructed that it can 
be opened for purposes of ventilation. Auto- 
matic closing doors may be used instead of screen 
doors. 

(4*4 All exterior op e nings, e xcluding op e nings 
» privy buildings, shall be effectively screened 
with 16 mesh material. All screen doors shall be 
equipped with self closing devices. 

(+4 [hj +T migrant housing is used during eeld 
weather, heating equipment which maintains a 
temperature e+° ho4- less than 64 degrees Fahren 
hett- » aU buildings, excluding privies, shall be 
provided. Migrant housing operated only be- 
tween May 4- ae4 September 44 shall be exempt 
from this requirement. Migrant housing shall be 
provided with functional heating equipment. To 
determine the adequacy of the heating equip- 
ment, the ratio of the BTU rating of the heating 
equipment to the total cubic feet of each building 
shall be no less than ten BIT's per cubic foot 
or the heating system shall be certified as ade- 
quate by a building inspector or a licensed heat- 
ing contractor or engineer. The heating 
equipment shall be in place or in storage on the 
date the permit is issued. Migrant housing op- 
erated only between May J_ and September 15 
shall be exempt from the requirements of this 
Paragraph. 

fj4 rij Smoke detectors and alarm devices shall 
be provided in each building used for sleeping as 
follows: 

(1) Rooms used for sleeping which open to 
the outside and which have less than 900 
square feet of sleeping area shall be ex- 
empt. Rooms used for sleeping which 
open to the outside and are 900 square 
feet or larger shall have one smoke detec- 
tor and alarm device per 900 square feet 
or fraction thereof. 

(2) Where rooms used for sleeping open to a 
common corridor or hall, smoke detectors 
and alarm devices shall be located ap- 
proximately 15 feet from the ends of the 



hall or corridor and at approximately ev- 
ery additional 30 linear feet of hall or cor- 
ridor. 

(3) Rooms used for sleeping which do not 
open to a common corridor or to the 
outside shall have one smoke detector and 
alarm device for each 900 square feet of 
floor space or fraction thereof. 

(4) Where rooms used for sleeping open to 
an adjoining room which is the only me- 
ans of egress, the adjoining room shall 
have one smoke detector and alarm device 
for each 900 square feet of floor space or 
fraction thereof: 

(5) Smoke detectors and alarm devices may 
be direct wire connected to AC power, 
fixed plug to AC power, or battery oper- 
ated. 

(6) Smoke detectors and alarm devices shall 
be properly maintained by the migrant 
housing operator, crew leader, and mi- 
grants. 

(7) Smoke detectors and alarm devices shall 
be located on ceilings or interior walls in 
accordance with installation instructions. 

fk-4 (ii At least one fire extinguisher shall be 
provided in each building used for sleeping. Ex- 
tinguishers shall be located so that they arc ac- 
cessible and within approximately 100 feet of any 
part of the building used for sleeping. One tire 
extinguisher shall be provided in each building 
used for cooking located within 30 feet of a 
building used for sleeping. Fire extinguishers 
provided in a cooking area shall have a minimum 
rating of 5 BC. Fire extinguishers for areas other 
than cooking shall have a rninimum rating of 2A. 

(1^ (k| All two-story buildings shall have a 
stairway and a fire escape, such as a permanently 
affixed exterior ladder or second stairway. 

Statutory Authority G.S. 130A-239. 

.2123 WATER SUPPLY 

(a) The water supply used for drinking, cook- 
ing, bathing, and laundry purposes shall be lo- 
cated, constructed, maintained, and operated in 
accordance with the Commission for Health 
Services rules governing water supplies. Copies 
of 10 NCAC 10A .1700 and 10 NCAC 10D 
.0600 through .2500 as amended through January 
1, 1985, may be obtained from the Division of 
Health Services, Department of Human Re- 
sources, P. O. Box 2091, Raleigh, NC 
27602-209 1 . A sample of water shall be collected 
by the local sanitarian and submitted to the lab- 
oratory section of the division for bacteriological 
examination. Acceptable laboratory results are 
required before the permit may be issued. 



NORTH CAROLINA REGISTER 



225 



PROPOSED RULES 



(b) A water supply system shall he capable of 
delivering 35 gallons per person per day as certi- 
fied by a licensed well driller or engineer. 

(c) One or more drinking fountains shall be 
provided for each 100 occupants or fraction 
thereof and shall be readily accessible to all 
buildings. The construction of drinking foun- 
tains shall comply with ARI Standard 1010-84. 
Copies of ARI 1010-84 may be obtained from 
Air-Conditioning and Refrigeration Institute, 
1501 Wilson Boulevard, Arlington, Virginia 
22209. The wastewater from water fountains 
shall be disposed of in an approved, sanitary 
sewage system. Common drinking cups are 
prohibited. 

(d) A hot-water system shall be provided. The 
hot -water system shall be si/ed at no less than 
one kilowatt or 3,3011 B 11 s per migrant and no 
less than ten gallons of storage capacity per mi- 
grant. 

Statutory Authority G.S. 130A-239. 

.2124 TOILET FACILITIES 

(a) bach toilet room shall be aeeess&le without 
»»y person passing through another sleeping 

ll'l'lfl. I t. * 1 I tr I rtTTTTTTTT h ' ' 1 1 1 1 1 f ll t V t" CT Vl" II 1 CM t ^t^ i II r t Ft*™^ 

than ■+* squar e feet h* area, opening directly te 
the outside area h* otherwise be siitisfactorily 
ventilated. AH- outside openings shall be screened 
with 1 6 mesh material. Ne- fixture, w ater clos e t, 
chemical toilet, ef urinal shall be located h+ a 
room used f-et aey- purpos e other than a toil e t e* 
bathing facility. Toilet rooms shall be provided 
with windows as required in Rule .2122 or shall 
be provided with mechanical ventilation. 
(b-)- A toilet room ef privy shall be located 

' i i1 Km I I 1 1 I r . . ti , \ ( f K.i i t j -\ , i t* i i t . 1 1 ■ - » Vi . 1 i.uMti , I r.\, mi 
TT ITI1IIT E TT T T I C^TT ( V T L I 1L OTT7T L ' 1 LUl 11 ~l LL I '11 li, rTTTTTTTT 

fe} [b| When males and females are housed in 
a migrant housing facility, separate Separate toi- 
let rooms or privies shall be provided for each sex 
except where a toilet is provided for a family unit. 
These separate toilet rooms or privies shall be 
distinctly marked for "men" and for "women" 
by signs printed in Fnglish and in the native lan- 
guage of the persons occupying the migrant 
housing, or marked with easily understood pic- 
tures or symbols. If the facilities for each sex are 
in the same building, they shall be separated by 
solid walls or partitions extending from the floor 
to the roof or ceiling. The number of water clo- 
sets or privy seats provided for each sex shall be 
based on the maximum number of persons of 
that sex which the migrant housing is designed 
to house at any one time, in the ratio of one such 
unit to each 1 5 or fewer persons. 

f44 [c| All plumbing fixtures shall be of an ap- 
proved type and shall be properly installed. 



(e} Fach toilet room shall be properly lighted. 

(4} (dj Privies and toilet rooms shall be kept in 

a sanitary condition. U- ohall be tbe responsibility 

• \t il^^ *-|"i l IT'I T1 1 Kmiiinn <""Hft i >r"'1 t (\ V I ' T" l 1 ' i 1 ' Iflflflflg 'infl 
KJl 1 1 IL 1 1111 El Ed 1 F 1 1 " GrS UIC, DTTwnmTI j OTt^T rtTroCT^ CfrtTT 

migrants te have tb« toilet rooms ae4 privies 
cleaned daily. Toilet paper shall be provided by 
tbe migrant housing operator ef crew l e ader, in 
all toilet rooms and privies. 

(§) [e] All toilet waste shall be disposed of in 
accordance with Rule .2125 of this Section. 

Statutory Authority G.S. J30A-239. 

.2126 LAUNDRY: HANDWASHING: AND 
BATHING FACILITIES 

(a) Laundry, handwashing, and bathing shower 
facilities shall be provided I» housing which ba* 
shared facilities, such as barracks ef multi family 
buildings, these facilities shall be provided in the 
following ratio: 

(1) One handwash basin per seven migrants. 

( 2) Separate showers shall be required fef e ach 

f i-i-v I Iriii .' It Q l i • . -n- ti . -w i . j t.ii- Q i |M 111 »-\ r- t 1 1 1 t *■ 

SJV, ■ J\ . TTTTT^T >T TV II 11 rTCTTCT rTTT L!L1 I < I \}\ T\- ' * Ll 

migrants. Shower heads shall be placed 
at least ^4 inches apart with a minimum 
ef seven square feet ef floor space pef 
shower head. When males and females 
are housed in a migrant housing facility. 



separate showers shall be required for each 
sex. The number of shower heads pro- 
vided for each sex shall be based on the 
maximum number of persons of that sex 
for which the migrant housing is designed 
to house at any one time in the ratio of 
one shower head for each ten or fewer 
persons. Shower heads shall be placed at 
least 36 inches apart with a minimum of 
seven square feet of floor space per shower 
head . 



(3) 



One laundry sink or clothes washing ma- 
chine for every 30 or fewer persons, 
(b) Floors shall be ef smooth finish ae4 shall 
be impervious te moisture. W Tie re nec e ssary, 

T I i \ i"i w .lrnn.' I f-i I | 1 1 1^^ t-\ r , \ i ■ I . 1 ■ i. I t j-i ill 1\ nil ■ ^ nfllim 

rooms, ef laundry rooms ae4 toilet rooms te fe- 
mov e wastewater a«4 facilitat e cl e aning. Floor 
drains shall be prop e rly locat e d, ae4 the floor 
shall be graded te drain. 44te walls a&4 partitions 
ef shower rooms a«4 laundry rooms shall be 
smooth im4 impervious te the heiglit ef splash. 
Where laundry, handwashing, and shower facili- 
ties are locate d in a building, floors shall be of 
smooth finish and shall be impervious to mois- 
ture, and walls and partitions shall be smooth 
and impervious to the height of splash. Where 
laundry and shower facilities are located in a 
building, floor drains shall be provided and 



226 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



properly located, and the floor shall be graded to 
drain. 

^^^A J^i ^^^^^^^^^^^^^^1 C-\ 1 *-^*-fc M r ^^X E^^^^ ^^^^^ ^^^^Ll |TlrtrYtiTrt 

Iff I 111 UCIV-^J UUIV LnJl^TTTT T ^^T I^^^T rT^^^T ^^^^TT r^mTTxTTC 

water shall be provided fof battling aft4 laundry 
purposes. Facilities fof heating water to a t e rn 
perature ef -HQ degrees Fahrenheit shall be pro 

(4} (c) Adequate facilities for drying clothes, 
such as clothes lines, shall be provided and con- 
veniently located. 

(e} [dj AH laundry rooms, shower rooms, an4 
service - buildings shall be k e pt clean by tbe mi- 
grant housing operator, the efew- leader, as4 ffe- 
grants. All laundry, handwashing, and shower 
facilities shall be kept clean. 

{fy (e| All laundry, handwashing, and bathing 
shower facility wastewater shall be disposed of 
consistent with Rule .2125 of this Section. 

(f) I aundrv, handwashing, and shower facilities 
shall be located in a building. Migrant housing 
operated only between May J_ and September 15 
shall be exempt from the requirement of this 
Paragraph . 

Statutory Authority G.S. I30A-239. 

.2127 LIGHTING AND ELECTRICAL 
OUTLETS 

(a) Each habitable room m migrant housing 
shall be provided with at least »«e c e iling type 
light fixture tt«4 at- least e«e separate floor s* 
wall type electrical receptacle fef each 4W4 square 
feet- e+ floor space. Laundry a«4 toilet rooms 
affe room ', where people congregate shall contain 
at- least e«e ceiling »f wall type light fixture. 
1 ight l e v e ls h* toilet a«4 storage rooms, kitchens, 
atfe living quarters shall be adequate. All rooms 
in migrant housing buildings including hallways, 
shall be provided with at least one ceiling-type 
or wall-type fixture, and one floor or wall -type 
electrical receptacle. 

(b) Pathways te outside toilet, bathing, a«4 
other facilities shall be adequately lighted during 
all hour! , ef darkness. I ight fixtures shall be 
provided for lighting outside laundry, handwash- 
ing, and shower facilities and shall be provided 
for lighting pathways to laundry, handwashing, 
and shower facilities, chemical toilets, and privies. 

fe} AH lights, electrical outlets, a«4 visible wfr- 
»g shall be maintained fe a safe affe proper 
working order. 

Statutory Authority G.S. 1 30 A -239. 

.2128 SOLID WASTE DISPOSAL 

(a) Impervious, cleanable containcr(s) with 
lid(s), approved by the division, shall be provided 
for the storage of solid waste. 



(b) Solid waste containers shall be kept clean, 
by tbe migrant housing operator, crew l e ader, 
aft4 the migrants. 

(c) Solid waste containers shall be emptied 
when full, but not less than once a week. 

(d) All solid waste shall be disposed of in an 
approved landfill or by a method approved by 
the division in accordance with state laws and 
rules. 

Statutory Authority G.S. I30A-239. 

.2129 KITCHEN AND DINING FACILITIES 

(a) All food preparation and eating areas pro- 
vided shall be maintained in a clean and sanitary 
manner, by the migrant housing operator, crew 
leader, a«4 migrants. 

(b) Where central food service facilities are not 
operated for pay, stove(s), refrigerator(s), table(s), 
and sink(s), shall be provided for migrants to use 
in preparing their own food. 

(c) Where central food service facilities are op- 
erated for pay, they shall be operated in accord- 
ance with: tfre following: G.S. Chapter 130A, 
Article ^ Part 6. However, if food is provided 
for pay only to persons for periods of a week or 
longer, then the operation is exempt from the 
requirements of G.S. Chapter 130A, Article S^ 
Part 6, pursuant to 130A-250. 

(4} Eood Servieo Utensils atfe Equipment 
(A4 Equipment affe utensils shall be se- 
constructed as to be e asily cleaned a»4 

■•}•>■ l|] Kii L jAI^I m ■ '. \i \. l «•■ *f* ■ n «- v i i «-4 ■ .,',i .- n :i ( K 

'l n.iri i 'u iv*j i. p i rrr isi pvhj i ci 'nil . itiii I uir :t w tt i r 

"'"'■''' I ■ \ ,~\ , 1 sir , Irii-il- , ■> ,-t r-t-i , i i r\ i-i-in) -i .-« t ,.- ti ■ i 1 1 
ttTTTCTT rcTTTTT X.J I UI II in L'UlllL 1 II I L'l/HlUVt ~1 I (XT I , 

ift addition, be e asily acc e ssible fef clean 
fegr a«4 shall be nontoxic, corrosion ro 
sistant, nonabsorbent, affe free ef open 
crevioos. Disposable articles shall be 
mad e from nontoxic materials. 
fB} U single service e ating a«4 drinking 
utensils are used, they shall be properly 
stored ajfe handled m order te- prevent 
contamination. U multi use e ating affe 
drinking utensils are us e d, they shall be 
washed, rinsed, a«4 sanitieed aft e r each 



(€) Pots, pans, affe other utensils used m 
tbe preparation et= serving ef food &? 
drink, a«4 all food storago ut e nsils, shall 
be thoroughly cleaned affef each user 
Cooking surfaces ef- e quipment, if afty7 

| }l • I 1 1 1 Vt - > j "* 1 « > ■ in I ^1 I I 1 1 ' a ' "' I * '~» n.'.i nn ,^\i Hm T 

rrnrxTT C7C ctctttt^ct ut icm u \j 1 1 fv tiiw " trrtTT 

Non food contact surfaces ef equipment 
shall be cl e an e d at- such intervals as ie- 
keep them » a cl e an a»4 sanitary' condi 

f©} Ne- polish Bf other substance contain 
feg cyanide ©* other poisonous material 



NORTH CAROLINA REGISTER 



227 



PROPOSED RULES 



■ . . hull be esed- fef »e cl e aning ef polishing 
ef eating ef cooking utensils. 
£4*4 Cloths used h* fr4e kitchen shall be 
cl e an. Ivach disposable item shall be esed 

1.7 1 LI T I'll CC 

f4^4 Containers aftd- cl e an utensils shall be 
stored i» a clean place. Containers aftd 
clean utensils shall be cov e red, inverted, 
stored ift tight, clean cabinets, ef other 

^^^^^^^ ^^^^J^^^i ^^i ' 1 ] | I t ^ I \ \ ' I I "I I I fc hf ^^b t^^ f** w~ . \ \ ■ n , t 

T' 1JU TTTTTT^ 111 .) LJl. 1 1 CT 1 1 ECO 1 1 EC I LI-' t^T J'H.'f\.11l 

contamination. After cleaning aftd- until 
food contact surfaces ef equipment 



shall be protected from contamination. 
Utensils shall be handled m such a man 
ftef as fce prevent contamination. 
fGf Disposable utensils shall be purchased 
only m sanitary containers, shall be stored 
therein m a clean, tfry plac e until used, 

'in.l ■■ V-i 1 1 1 1 t~» . > 1 1 ifi.ll.i. i » n -1 e -\ ni<nn: «-»-» imifii- 

U. 1 1 VJ , ' I I 111 1 I '\. 1 ECQ 1U IvQ ITT CT JU1 11 IU1 I 1 1 IU1 11 IL 1 . 

f44-^ Acceptable facilities fef washing pots, 
pans aftd- other cooking utensils shall be 
provid e d A two section residential siftk- 
is acceptable. 

(44 Acceptable storage facilities shall be 

OlO VllJL'u cttrfcr ?'f litil 1 79 RCHT t'i^it Ft ctttw III?© 

ef vermin. 
f2} I'ood Supplies 

(-A-f lood, including milk and- milk pfe- 
ducts. shall be cl e an, wholesome, free 
from spoilage, free from adult e ration and- 
misbranding, and safe fef human con 
sumption. Only Grade —V^ milk may be 

(44+ if non acid ef low acid homo canned 
foods afe used, they should be boiled fef 
4-U minutes m order te destroy a«y toxin 
tfrat- may hav e been produced by- bacteria 
surviving (be canning process. 
(44 I ; ood Protection 

(A) foods shall be protected from con 
taminution while being stored, prepared, 
served, aed during transportation. J^ef- 
ishable foods shall be stored at- such tern 
peratures as w441 protect against spoilage. 
Potentially hazardous food shall be main 
tained at- sate temperatures (4$ degrees Pr 
ef below. ef 4-W degrees ft- ef above) e*- 
eept during necessary periods sf prepara 
free a»4 serving, Frozen food shall be 
kept at- such temperatures as te remain 
frozen, except when being thawed fef 
preparation ef wser Potentially hazardous 
frozen food shall be thawed at- r e frigerator 
temperatures ef 44 degrees Pr ef below; 
ef quick thawed as part ef the coolung 
proc e ss: ef by a m e thod approved by- the 
division. A» indicating thermometer shall 
be located ift each refrigerator. R.aw fruits 



rmrni i '\j tt utti TVT3 i 

Stuffings, poultry, stuffed 

rw n n ♦ j- ^tirl QA^dl^^ riri/l Tvn «- I .- a «-» . 1 n ■-* «-l r 

111 T-T. II.' CO IU pTToTTTTT CTTTTT L,1_TT H U.1 IU I ' 1 .' I J\ 

products shall be thoroughly cooked be- 
fr>fe being served. Salads made ef meat, 
poultry, potatoes, frsfrr shellfish, ef eggs, 
and- other potentially hazardous prepared 
food, shall be prepar e d, preferably from 
chilled products, with a minimum ef fna- 
nual contact. Portions ef food once 
served te a» individual shall He*- be served 
again. 

y^^T tTTv pt?TTT OTTTTTT fTTTT Ttt? CIITTTT'VtfCr ITT til t M 

room e* afea m which feed is prepared 
ef stored. I ive pots, unless caged and re- 
strictod from tbe immediate eating area, 
shall net- be allowed m any- room ef area 
i» which food is served. 

f&4 Refrigeration facilities, fret- food storage 
facilities, aftd- effective insulated facilities 
shall be provided as needed te assure tbe 
maintenance ef all food at- required tern 
peratures during storage, preparation, a«4 
serving. 

ff>| Containers ef food shall be stored 
above tfre floor. e» clean racks, shelves, 
ef other clean surfaces, i» such a manner 
as te be protected from splash a»4 other 
contamination. 
(-H Food Service P e rsons 

(-A+ Persons, while preparing ef serving 
food ef washing e quipm e nt ef ut e nsils, 
shall wear clean outer garments, maintain 
a high degree ef personal cleanliness. a«4 
conform te hygienic practices. They shall 
wash their hands thoroughly before start 
*Ȥ work aftd- as often as necessary te- fe- 
move se» aee contamination. After 
visiting a toilet room, persons shall wash 
their handu thoroughly t» a lavatory aft4 
ift He ease i» tfre kitchen sink. They shall 
net- ese tobacco ift afty- form while pfe- 
paring ef serving food. 

rTTj i ~xy pci 3d 1 1 . tt iii i^ mrmTTi tttttt cr u i .t^- 11 ju 

ift a communicabl e form, ef while a eaf- 
rief ef such a diseas e , ef while afflicted 
with boils, infected wounds, sor e s, e* a» 
acute respiratory infection, shall work i» 
afty- capacity i» which ther e is a likelihood 
ef tfrat- person contaminating food ef 
food contact surfaces with pathogenic ef- 
ganisms. Jf e ither Ae migrant housing 
operator ef crow leader has reason te ses- 
peet- teat- afty food s e n ic e person has 
contracted a»y diseas e » a communicable 
form ef has become a carrier ef such d+s- 

f-t ^ ,- ,-» l~\ . i i- Vi ■ t 1 1 n.itin.' <bi 1 ii . ■ ■ i 1 Vi. filtb. -l.i 

DCRTV % 1 IV rTTTTTT I 1 <. I I 11 f 1 1 IV 1 1 H.UI rrCTnTTT TJV 

partment immediately. 



22S 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



Statutory Authority G.S. /30A-239. 

.2130 INSECT: RODENT: AND ANIMAL 
CONTROL 

(a) Every onclosod shelter shall be constructed, 
equipped, ami maintained, se fof as reasonably 
practical, to prevent the entrance e* hurborago 
to rodents, insects, ami other vermin. A contin- 
uing, safe, and effective exterminating program 
shall be instituted where their presence is de- 
tocted. the presence of rodents, insects, or other 
vermin i_s detected. 

(b) U dogs ate keto ©» toe premises, ri- wili be 
toe responsibility to toe operator, crow leader, ef 
migrant to keep them restrained. Dogs kept on 
the premises shall be restrained. 

Statutory Authority G.S. I30A-239. 

.2131 FIRST AID 

(a) A first-aid kit approv e d by toe division shall 
be maintained and made available in the migrant 
housing for the emergency treatment of injured 
persons. 

(b) ^toe cr e w loader ef bis designated represen 
tativ e shell be to charge to toe first aid kto The 
first-aid kit shall be readily accessible for use at 
all times. 

Statutory Authority G.S. 130A-239. 

.2132 REPORTING COMMUNICABLE 
DISEASE 

(e) : fte migrant housing operator ami crow 
lead e r shall hav e toe responsibility to report im- 
mediately- to tbe local health department toe 
name ami addr e ss ef a»y individual m toe m- 
grant housing luiown to have »f suspected ef 
having a communicable diseas e . 

fb} Whenever there shall occur to a«y migrant 
housing a ease ef susp e cted food poisoning e* a» 
unusual prevalence to afty illness to which fever, 
diarrh e a, se*e throat, vomiting, ef jaundice » a 
prominent symptom, toe migrant housing opor 
atoF ami crew leader shall have toe responsibility 
to r e port immediately toe existence to toe eto- 
br e ak to toe local h e alth department. 

Communicable diseases and communicable 
conditions shall be reported to the local health 
department in accordance with G.S. 130A, Arti- 
cle 6, Fart I, and 10 NCAC 7A .0100. 

Statutory Authority G.S. 130A-239. 

****************** 



IVotice is hereby given in accordance with G.S. 
1 SOB- 12 that the DHRj Division of Aging intends 
to amend regulations cited as 10 NCAC 22F 
.0101, and .0301. 

1 he proposed effective date of this action is Oc- 
tober 1, 1988. 

1 he public hearing will be conducted at 1:30 
p.m. on July 15, 1988 at North Carolina Division 
of Aging, 1985 Umstead Drive, 2nd Floor, Rm. 
297, Raleigh, NC 27603. 

Comment Procedures: Written comments con- 
cerning the proposed regulations must be submit- 
ted by July 15, 1988 to: Mr. Greg Brewer, 
Dh'ision of Aging, 1985 Umstead Drive, Raleigh, 
N.C. 27603. Oral comments may be presented at 
the hearing. Any person may request information, 
permission to be heard or copies of the proposed 
regulations by writing to Mr. Brewer at the afore- 
said address, or by calling him directly at (919) 
733-3983. 

CHAPTER 22 - AGING 

SUBCHAPTER 22F - ADOPTION BY 
REFERENCE 

SECTION .0100 - OLDER AMERICANS - 
PROGRAMS REGULATIONS 

.0101 TITLE 

45 C.F.R. Part 1321 - Grants for State and 
Community Programs on Aging, as amended, 
has been adopted by reference pursuant to G.S. 

150B-14(c). 

Statutory Authority G.S. 143B-I0; 143B-138; 
143B-181.1; I50B-14. 

SECTION .0300 - ADMINISTRATION OF 
GRANTS 

.0301 TITLE 

The following regulations are adopted by refer- 
ence pursuant to G.S. 150B- 14(c): 

Statutory Authority G.S. J43B-/0; 143B-138; 
143B- 181.1; 150B-14. 

****************** 



iV otice is hereby given in accordance with G.S. 
1 SOB- 12 that the DM Rj Division of Aging intends 
to repeal regulations cited as 10 NCAC 22G 
.0209, and .0307. 



NORTH CAROLINA REGISTER 



229 



PROPOSED RULES 



1 he proposed effective dale of this action is Oc- 
tober 1, 1988. 

1 he public hearing will be conducted at 1:30 
p.m. on July 15, 1988 at North Carolina Division 
of A%ing, 1985 V instead Drive. 2nd Floor, Rm. 
297, Raleigh, NC 27603. 

C omment Procedures: Written comments con- 
cerning the proposed regulations must be submit- 
ted by July 15, 1988 to: Mr. Greg Brewer, 
Division of Aging, 1985 Umstead Drive, Raleigh, 
N.C. 27603. Oral comments may be presented at 
the hearing. A ny person may request information, 
permission to be heard or copies of the proposed 
regulations by writing to Mr. Brewer at the afore- 
said address, or by calling him directly at (919) 
733-3983. 

SUBCHAPTER 22G - PROGRAM OPERATIONS 

SECTION .0200 - TITLE III: AREA AGENCIES 
ON AGING 

.0209 STATE AGENCY HEARING PROCESS 
(REPEALED) 

Statutory Authority G.S. 1 43 B- 10: MSB- 138: 
I43B-I81.I: 45 C.F.R.. Chapter Mil, Part 1321. 

SECTION .0300 - TITLE III: NON-PLAN AREAS 

.0307 TITLE VI OF THE CIVIL RIGHTS 
ACT (REPEALED) 

Statutory Authority G.S. 143B-I0: MSB- 138; 
143B-/8/.1: 45 C.F.R., Chapter Mil. Part 1321: 
45 C.F.R.. Parts 80 and 81. 

'k'k'k-k-k'k-k-k-k'k'k'kieJi'k'k'k'k 



iV otice is hereby given in accordance with G.S. 
I SOB- 12 that the Division of Aging intends to 
adopt regulations cited as 10 NCAC 22G .0315, 
and .0316. 

1 he proposed effective date of this action is Oc- 
tober I, 1988. 

1 he public hearing will be conducted at 1:30 
p.m. on July 15. 1988 at North Carolina Division 
of Aging, 1985 i 'instead Drh-e, 2nd Floor, Rm. 
297, ^Raleigh. NC 2^603. 



Co 



■omment Procedures: Written comments con- 
cerning the proposed regulations must be submit- 



ted by July 15, 1988 to: Mr. Greg Brewer, 
Dhision of Aging, 1985 Umstead Drive, Raleigh, 
N.C. 27603. Oral comments may be presented at 
the hearing. Any person may request information, 
permission to be heard or copies of the proposed 
regulations by writing to Mr. Brewer at the afore- 
said address, or by calling him directly at (919) 
733-3983. 

SECTION .0300 - TITLE III: NON-PLAN AREAS 

.0315 DLTIES REGARDING DISCRIMINATION 

(a) The Division of Aging administers Older 
Americans Act, state, and other funds in com- 
pliance with 45 C.F.R., Parts 80, 84 and 91. 
Each agency, contractor and subgrantee is re- 
quired to abide by these provisions, which pro- 
hibit discrimination in service delivery and 
employment in division administered programs 
on the basis of age, race, color, national origin 
and handicap. 

(b) In carrying out its responsibilities regarding 
discrimination, the Division of Aging shall per- 
form the following functions: 

(1) Inform and instruct Division of Aging staff 
regarding their obligations under the afor- 
esaid parts; 

(2) Inform and instruct all agencies and or- 
ganizations which provide services, finan- 
cial aid or other benefits under Older 
Americans Act programs of their necessity 
to comply with the aforesaid regulations 
as a condition to initial or continued fi- 
nancial participation in the program; 

(3) Inform beneficiaries, participants, poten- 
tial beneficiaries and other interested per- 
sons that services, financial aid and other 
benefits of the program must be provided 
on a nondiscriminatory basis as required 
by 45 C.F.R., Parts 80, 84 and 91; and of 
their right to file a complaint with the 
Division of Aging if there is evidence of 
discrimination on the basis of age, race, 
color, national origin or handicap. 

(4) Inform division staff, other agencies on 
aging, and older persons that referrals may 
not be made to agencies, institutions, or- 
ganizations, facilities, individual practi- 
tioners, etc. that engage in discrimination; 

(5) Inform all grantees that they shall main- 
tain a current properly executed Form 441 
as a part of their official files. A copy of 
Form 441 is available at the Division of 
Aging. 

(6) Division of Aging and grantee staff mem- 
bers shall conduct periodic reviews, in- 
cluding on-site visits as appropriate, of the 
agencies and organizations participating in 



230 



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PROPOSED RULES 



Older Americans Act programs to assure 
that their practices are in conformity with 
the Civil Rights Act, state and federal re- 
gulations and policies, and executed state- 
ments of compliance, 
(c) In addition, each agency, contractor and 

subgrantee that employs 15 or more persons 

shall: 

(1) adopt grievance procedures that incorpo- 
rate appropriate due process standards for 
the prompt and equitable resolution of 
complaints by recipients of services and 
employees which allege discrimination in 
service delivery on the basis of age, race, 
color, national origin or handicap; 

(2) designate at least one responsible em- 
ployee to coordinate compliance with this 
Section; and 

(3) notify recipients of service, applicants for 
service, applicants for employment and 
employees that it does not discriminate in 
admission to or access to, or treatment or 
employment in, its programs and activities 
on the basis of age, race, color, national 
origin or handicap. The notification shall 
also include an identification of the re- 
sponsible employee designated pursuant 
to Subparagraph (2). 

Statutory Authority G.S. 143B-10; 143B-I38; 
143B- 181.1; 45 C.F.R., Parts SO. 84, 91 and 1321. 

.0316 EMPLOYMENT DISCRIMINATION: 
PROCEDURES 

The North Carolina State Office of Adminis- 
trative Hearings is the designated entity for de- 
ferral of all claims alleging race, color, sex, 
religion or national origin discrimination in em- 
ployment, or retaliation for opposition to such 
alleged discrimination, filed by previous and cur- 
rent state employees or applicants for state em- 
ployment who were or are subject to N.C.G.S. 
Section 126-16 and Article 8 of Chapter 126, 
which have been filed within the time limits set 
forth in N.C.G.S. Section 126-38. Claimants 
filing pursuant to this Section must follow the 
procedures contained in 26 NCAC Chapter 4. 
Claims alleging discrimination on the basis of 
handicap should also be filed with the EEOC 
District Director at 5500 Central Avenue, Char- 
lotte, N.C. 28212 within 180 days following the 
alleged discriminatory action. Employees who 
do not work for the state, and applicants for 
non-state employment may also hie discrimi- 
nation claims, but they should do so at their local 
EEOC office within 180 days following the al- 
leged discriminatory action. 



Statutory Authority G.S. I43B-10; 143B-I38; 
143B-18I.1; 45 C.F.R., Parts 80, 84, 91 and 1321. 

****************** 



1\ otice is hereby given in accordance with G.S. 
I SOB- 12 that the Division of Aging intends to 
adopt regulations cited as 10 NCAC 221 .0101 - 
.0122, and .0201. 

J he proposed effective date of this action is Oc- 
tober 1, 1988. 

1 he public hearing will be conducted at 1:30 
p.m. on July 15, 1988 at North Carolina Division 
of Aging, 1985 Urns lead Drive, 2nd Floor, Rm. 
297, Raleigh, NC 27603. 



Co 



omment Procedures: Written comments con- 
cerning the proposed regulations must be submit- 
ted by July 15, 1988 to: Mr. Greg Brewer, 
Division of Aging, 1985 Umstead Drive, Raleigh, 
N.C. 27603. Oral comments may be presented at 
the hearing. Any person may request information, 
permission to be heard or copies of the proposed 
regulations by writing to Mr. Brewer at the afore- 
said address, or calling him directly at (9/9) 
733-3983. 

SUBCHAPTER 221 - DIVISION HEARINGS 
SECTION .0100 - GENERAL 

.0101 DIVISION HEARINGS IN GENERAL 

(a) The state Division of Aging has established 
a decision review process whereby certain per- 
sons aggrieved by an Area Agency on Aging final 
decision, who have exhausted local administra- 
tive remedies, who can demonstrate injury in 
fact, and whose petition contains the necessary 
facts to establish subject matter jurisdiction, may 
petition the state Division of Aging for a decision 
review hearing in accordance with and subject to 
these Rules and other recognized common law 
principles of judicial economy and restraint. 

(b) Pursuant to federal statutes and regulations, 
the state Division of Aging has also established 
a decision review process whereby aggrieved Area 
Agencies on Aging, and eligible applicants denied 
designation as planning and service areas, may 
petition the state Division of Aging for a decision 
review hearing in accordance with and subject to 
these Rules. 

(c) The Rules of Civil Procedure as contained 
in G.S. 1A-1 and the General Rules of Practice 
for the Superior and District Courts as author- 
ized by G.S. 7A-34 and found in the Rules Vol- 



NORTH CAROLINA REGISTER 



231 



PROPOSED RULES 



umc of the North Carolina General Statutes shall 
not apply in any hearings held by the state Divi- 
sion of Aging unless another specific statute or 
rule provides otherwise. Division of Aging 
hearings are not hearings within the meaning of 
G.S. Chapter 150B and will not be governed by 
the provisions of that Chapter unless otherwise 
stated in these Rules. Parties may be represented 
by counsel at all stages of the hearing process. 

Authority G.S. 143B-I0; I43B-138; I43B-181.1; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Pari 
1321; 45 C.F.R., Part 74, Appendix G. 

.0102 DEFINITIONS 

Unless otherwise redefined by this Section, the 
definitions contained in G.S. 150B-2 are incor- 
porated herein by reference pursuant to G.S. 
150B- 14(c). The following definitions shall ap- 
ply: 

(1) "Agency" means an Area Agency on Aging 
as defined in the Older Americans Act, 42 
U.S.C. Sec. 3001 et. seq. 

(2) "Division" means the North Carolina Di- 
vision of Aging of the North Carolina De- 
partment of I luman Resources. 

(3) "File or Filing" means personal delivery, 
delivery by certified mail, or delivery by li- 
censed overnight express mail of a document 
or paper to the current acting Assistant Sec- 
retary of the North Carolina Division of 
Aging at 1985 Lmstcad Drive, Raleigh, N.C. 
27603. A document or paper is deemed tiled 
as of the date it is delivered to the Assistant 
Secretary, or when properly addressed, offi- 
cially postmarked and accepted for delivery 
by the United States Postal Service or other 
licensed express mail service, whichever is 
earlier, filings addressed to a person other 
than the Assistant Secretary, or which fail to 
be tiled within the time periods established 
by the respective Area Agency, by these 
Rules, or by the hearing officer, or which 
otherwise fail to be filed in conformity with 
these Rules (i.e., no certificate of service) 
may be considered as improper fdings and 
denied, taken as an admission, or dismissed 
accordingly. Except for excusable clerical 
error, good cause and a showing of irrepar- 
able harm, an improper tiling shall not ex- 
tend the deadline for filing of documents. 
All tilings shall be submitted on 8 1/2" by 
1 1 " paper. 

(4) "Hearing" means an administrative pro- 
ceeding, requested by written petition, whe- 
reby a person aggrieved is given an 
opportunity to be heard regarding his or her 
rights, duties or privileges. All hearings shall 



be electronically recorded by the hearing of- 
ficer. Costs of certified transcripts or elec- 
tronic reproductions shall be borne by the 
parties requesting same, and shall be paid 
prior to delivery of same to the parties. 
Costs shall be determined by the Chief DoA 
Fiscal Officer at the time of the request. 

(5) "Hearing Officer" means a person desig- 
nated to preside over a decision review 
hearing. In the absence of contrary desig- 
nation, the Division attorney shall be the 
Hearing Officer for all such hearings. 

(6) "Respondent" means an agency, or in case 
of discrimination, an agency or service pro- 
vider, whom a petition has been fded against 
and who has been served with a copy of 
same. 

(7) "Serve or Service" means personal delivery, 
delivery by first class or certified United 
States Postal Service mail or delivery by li- 
censed overnight express mail, postage pre- 
paid and addressed to the party at his or her 
last known address. Service by mad or li- 
censed overnight express mail is complete 
upon placing the item to be served, enclosed 
in a wrapper addressed to the person to be 
served, in an official depository of the 
United States Postal Service or upon deliv- 
ery, postage prepaid and wrapped in a 
wrapper addressed to the person to be 
served, to an agent of the overnight express 
mad service. For purposes of service on the 
Division, the Assistant Secretary of the Di- 
vision shall be the designated agent. 

(8) "Service Provider" means a contractor or 
subgrantee receiving federal funds to provide 
service under the Older Americans Act, 42 
U.S.C. Sec. 3001 et. seq. 

Authority G.S. 132-6; 143B-10; 143B-13S; 
143B-I81.I; 42 U.S.C., Sec. 3027(a)(5); 45 
C.F.R., Part 1321; 45 C.F.R., Part 74, Appendix 
G. 

.0103 COMMENCEMENT OF A DIVISION 
HEARING: PETITIONS 

(a) In order to commence an administrative 
decision review hearing with the Division, a pe- 
tition must be fded in accordance with these 
Rules. The petition must be in writing, and must 
be signed by the aggrieved person submitting the 
petition or by the person's designated represen- 
tative. A petition must contain the name, ad- 
dress and phone number of the petitioner, as well 
as his representative if one is designated. If a re- 
presentative is designated, notice of meeting 
dates, requests for information, hearings deci- 
sions, etc. wdl be sent to the representative rather 



232 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



than the aggrieved person, unless the petition 
otherwise requests. The party who files a peti- 
tion shall simultaneously serve a copy of the pe- 
tition on all other parties and shall file a 
certificate of service together with the petition. 
Any petition filed by a party other than an 
agency shall be verified or supported by affidavit 
and shall state specific facts which tend to estab- 
lish that the respondent has substantially preju- 
diced the petitioner's rights and has failed to act 
as required by law, rule or procedure. 

(b) In addition to any pertinent requirements 
stated elsewhere in these Rules, a petition filed 
with the state Division of Aging must contain 
specific factual allegations which tend to establish 
that the petitioner is: 

(1) a service provider whose contract or sub- 
grant under an area plan has been termi- 
nated by an Area Agency on Aging in 
violation of applicable federal or state 
statutes, rules, policies or procedures, or 
Area Agency protest procedures; or 

(2) an eligible applicant who seeks to provide 
service under an area plan and whose ap- 
plication has been denied or rejected by 
an Area Agency on Aging in violation of 
applicable federal or state statutes, rules, 
policies or procedures, or Area Agency 
protest procedures; or 

(3) an applicant eligible for designation as a 
planning and service area in the state 
whose application has been denied by the 
state Division of Aging; or 

(4) an Area Agency on Aging whose area plan 
or plan amendment intends to be disap- 
proved or whose designation intends to 
be withdrawn by the state Division of 
Aging; or 

(5) a service recipient who has been discrimi- 
nated against in violation of federal or 
state law on the basis of age, race, color, 
national origin, income, or handicap in 
regard to delivery of Older Americans Act 
services by a contractor or subgrantee, or 
in regard to administration of such ser- 
vices by an Area Agency on Aging. 

(c) All petitions shall contain a statement of the 
relief sought by the petitioner. Petitioners who 
seek an administrative decision review hearing 
with the state Division of Aging must so state in 
their petition. However, the formal hearing 
process may be waived and informal disposition 
may be made at any time by the parties regarding 
any issues in the petition. Issues not addressed 
in the petition shall not be considered in the state 
hearing process and shall not be the subject of 
relief. Issues and facts may be dealt with by sti- 
pulation, agreement or consent order at any time 



by the parties. Petitions which are improperly 
filed, or which fail to contain proper subject 
matter, may be subject to denial of formal re- 
view. 

(d) Only those persons listed in Paragraph (b) 
of this Rule may petition for an administrative 
decision review hearing with the state Division 
of Aging. Petitioners under Subparagraphs 
(b)(1), (2) and (5) of this Rule shall file their re- 
spective petitions within 30 days following the 
date on which a final adverse decision has been 
rendered against them by an Area Agency on 
Aging. If no petition is filed within the respective 
30 day period, the Area Agency's action shall 
become final. Eligible applicants under Subpar- 
agraph (b)(3) and agencies under Subparagraphs 
(b)(4) of this Rule shall file their petitions within 
30 days after notification of denial or intention, 
respectively. If no petition is filed within the 30 
day period, then the Division's action shall be- 
come final. Petitioners shall exhaust all available 
administrative remedies before petitioning the 
Division of Aging for a decision review hearing. 

(e) Decisions or actions taken by the Division 
which substantially prejudice a person's rights, 
duties or privileges, but which are not listed in 
Paragraph (b) of this Rule are not proper subject 
matter for Division hearings and should be sub- 
mitted in a separate petition to the Office of Ad- 
ministrative Hearings in accordance with 10 
NCAC IB .0200 and 26 NCAC 3 .0003. Deci- 
sions or actions taken by an .Area Agency on 
Aging which are not listed in Paragraph (b) of 
this Rule are not proper subject matter for Divi- 
sion hearings and, subject to the expression or 
implication of private rights of action by state or 
federal law, should be contested in a court of law. 
Subject to the discretion of the Division hearing 
officer, improper subject matter in a petition may 
either be deleted or form the basis for dismissal 
of the entire petition. 

(f) After service of a final written decision upon 
the parties, if a party, other than an "applicant" 
in Rule .0103(b)(3), disagrees with the Division 
review hearing decision, the party may request a 
contested case hearing in accordance with 26 
NCAC 3 .0003 and 10 NCAC IB .0200 within 
30 davs of said service. For purposes of notice, 
26 NCAC 3 .0003 and 10 NCAC IB .0200 are 
incorporated herein by reference pursuant to G.S. 
150B- 14(c). 

Authority G.S. 143B-10; 143B-138; 143B-I81.1; 
1 SOB- 14; 42 U.S.C., Sec. 3025 (b)(1) and 
3027(a)(5); 45 C.F.R., Part 1321; 45 C.F.R., 
Parts 80, 84 and 91; 45 C.F.R., Part 74, Appen- 
dix G. 



NORTH CAROLINA REGISTER 



233 



PROPOSED RULES 



.0104 NOTICE OF FILING: NOTICE OF 
HEARING 

Upon receipt of a timely petition for an admin- 
istrative decision review hearing, the Division 
Hearing Officer shall promptly notify all parties 
of receipt of such filing, and shall arrange with 
the parties a time, date and place of hearing. 
Notice of the time, date and place of hearing shall 
be served on all parties not less than 15 days prior 
to the date of hearing. 

Authority G.S. I43B-10: 143B-138; 143B-IS1.I; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Part 74, Appendix G. 

.0105 ANSWERS TO THE PETITION 

(a) A respondent who is served notice of filing 
of a petition shall file a written response to the 
petition and shall serve a copy of such response 
with certificate of service upon all other parties 
within 15 days after service of notice. The writ- 
ten answer may be submitted in lieu of a personal 
appearance at the hearing. If the respondent de- 
sires to file an answer in lieu of appearance, he 
must designate such on the face of the answer. 

(b) Answers shall respond to each allegation 
of the petition, and may contain defenses, as- 
sertions of fact, and citations to applicable laws, 
rules and procedures. Failure to respond thor- 
oughly to a timely and valid petition shall be 
grounds for admission of facts contained in the 
petition. The validity and timeliness of the peti- 
tion may be contested in the answer. 

Authority G.S. 143B-I0; 143B-I3S; 143B-I81.1; 
42 U.S.C.. Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Part 74, Appendix G. 

.0106 DOCUMENTS 

All documents required to be filed pursuant to 
these Rules shall likewise be served on all other 
parties by the filing party. The original of even- 
document filed shall be endorsed with a certif- 
icate of service signed by the party making the 
service or by his designated representative, stating 
that such service has been made, the date of ser- 
vice, and the manner of service. 

Authority G.S. 143B-/0; 143B-138; 143B-1SI.1; 
42 L.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Part 74, Appendix G. 

.0107 VENUE 

Venue shall be in any county which the Hearing 
Officer determines in his discretion will promote 
the ends of justice or better serve the convenience 
of the parties and witnesses. 



Authority G.S. I43B-10; 143B-138; 143B-181.1; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Part 74, Appendix G. 

.0108 DISCOVERY 

(a) Parties may exchange information volun- 
tarily with one another without making formal 
request for discovery. Such provision and ex- 
change of information shall be completed by 5:00 
p.m. on the day preceding the date of hearing. 

(b) Upon request of a party or on his own 
motion, the Hearing Officer may allow the par- 
ties any or all of the methods of discovery pro- 
vided in the Rules of Civil Procedure, G.S. 1A-1. 
The Hearing Officer may extend or limit the time 
of discovery as necessary, but in no case shall 
discovery continue past 5:00 p.m. on the day 
immediately preceding the date of hearing. 

(c) Failure to respond to an authorized dis- 
covery' request shall be grounds for denial of re- 
view, admission of facts or other sanction as 
determined by the Hearing Officer. 

(d) Motions for discovery may be made by a 
party or designated representative in writing or 
by phone to the Division Hearing Officer. The 
Hearing Officer shall rule on motions for discov- 
ery and notify the parties promptly of his deci- 
sion. Parties may object to disco very motions 
orally or in writing. 

(e) Discovery shall be directly related to the is- 
sues and shall not be unduly burdensome or be 
used to delay the proceedings. 

Authority G.S. 143B-10; 143B-138; 143B-181.1; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R.. Part 74, Appendix G. 

.0109 EVIDENCE 

(a) Whenever material matters of fact are in 
dispute as stated in the petition, factual evidence 
and expert opinion testimony related to the issues 
may be presented at the hearing. Petitions which 
do not contain disputed material facts or whose 
disputed material facts have all been resolved by 
stipulation, etc. may be reviewed and written de- 
cision issued by the Hearing Officer without ne- 
cessity of a hearing. In such case, a party or the 
party's representative may make a written motion 
for summary decision which shall include written 
arguments as to the applicable laws, rules, poli- 
cies and procedures. The Hearing Officer may 
also require submission of such written argu- 
ments any time he determines that no material 
facts are in dispute, and may then render his de- 
cision accordingly. 

(b) Parties shall be entitled to present evidence, 
examine and cross-examine witnesses at the 
hearing. A witness may be cross-examined on 



234 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



any matter material to the proceeding without 
regard to the scope of his direct examination. 
Irrelevant, immaterial, unreliable and unduly re- 
petitious evidence shall, upon objection by a 
party or designated party representative, be ex- 
cluded at the discretion of the Hearing Officer. 
Hearsay, whether written or spoken, is likewise 
excludable except for recognized legal exceptions. 
Objections to evidence shall be timely and briefly 
state the grounds relied upon. 

(c) When evidence is alleged to be of a confi- 
dential nature, the Hearing Officer may examine 
such evidence in camera, at his discretion, if nec- 
essary to preserve its confidentiality. 

Authority G.S. 143B-10; 143B-138; 143B-181.1; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Part 74, Appendix G. 

.0110 TESTIMONY: WITNESSES 

All oral testimony at the hearing shall be under 
oath or affirmation and shall be recorded. Any 
party may be a witness and present witnesses on 
the party's behalf at the hearing. When in his 
determination it is necessary, the Hearing Officer 
may exclude witnesses from the hearing room so 
that they cannot hear the testimony of other 
witnesses. 

Authority G.S. I43B-10; I43B-I3S; I43B-18I.1; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R.. Part 74. Appendix G. 

.0111 SUBPOENAS 

Although the Division Hearing Officer will not 
issue subpoenas for a proceeding, he may issue 
requests cither orally or in writing that a person 
appear at the hearing to testify and/or to supply 
documentary evidence. Parties and witnesses 
who fail to appear at a hearing or who fail to 
produce evidence at the request of the Hearing 
Officer may jeopardize claims and defenses. 

Authority G.S. 143B-/0; 143B-/38; 143B-18I.1; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R.. Part 74, Appendix G. 

.0112 PREHEARING STATEMENTS 

The Hearing Officer may serve all parties with 
an Order for Prehearing Statements. The parties 
thus served shall file the requested statements 
within 15 days of service, setting forth the fol- 
lowing: 

(1) a list of facts, conclusions, and exhibits to 
which the party will stipulate; 

(2) a list of proposed witnesses with a brief 
description of each witnesses' proposed tes- 
timony; 



(3) a description of what discovery, if any, the 
party will seek to conduct prior to the hear- 
ing and an estimate of the time needed to 
complete discovery; 

(4) any other matters the Hearing Officer 
deems necessary. 

Authority G.S. 143B-10; 143B-138; 143B-18I.1; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Part 74, Appendix G. 

.0113 PREHEARING: SETTLEMENT 
CONFERENCE 

Upon the request of any party or upon his own 
motion the Hearing Officer may direct the parties 
to participate in an informal 

prehearing/settlement conference. The Hearing 
Officer shall give the parties not less than ten 
days notice before the scheduled date of a con- 
ference. The purposes of the conference shall be 
to simplify issues, resolve disputes and expedite 
disposition of the case. If the parties reach a 
settlement during the conference, such shall be 
set forth in a settlement agreement or consent 
order and made a part of the record. 
Prehearing/settlement conferences may be con- 
ducted by conference telephone call. 

Authority G.S. 143B-/0; 143B-13S; 143B-18I.I; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Part 74, Appendix G. 

.01 14 FAILURE TO APPEAR AT HEARING 

(a) A party to a decision review hearing may 
waive the right to be present during any portion 
of the proceedings. The waiver must be know- 
ingly and intelligently made by the party or his 
designated representative. 

(b) If a party served with notice of hearing fails 
to appear at a scheduled hearing without having 
waived his right to be present, the Hearing Offi- 
cer may: 

(1) proceed with the hearing in the party's 
absence; 

(2) order a continuance or like disposition; 

(3) enter an order of default; or 

(4) deny review of the decision. 

Authority G.S. 143B-10; 143B-138; 143B-1S1.1; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Part 74, Appendix G. 

.0115 MISCONDUCT AT HEARING 

Disrespectful, disorderly or contumacious lan- 
guage or conduct, refusal to comply with di- 
rections, or continued use of dilatory tactics by 
any person at any decision review hearing shall 
constitute grounds for immediate exclusion of 



NORTH CAROLINA REGISTER 



235 



PROPOSED RULES 



such person from the hearing by the Hearing 
Officer. 

Authority G.S. 143B-10; I43B-I38; 143B-181.1; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Pari 74, Appendix G. 

.0116 SANCTIONS 

If a party fails to comply with an order or re- 
quest of the Hearing Officer, the Hearing Officer 
may: 

( 1 ) find that the allegations of or the issues set 
out in the petition or other pleading may be 
taken as true or deemed proved without 
further evidence; 

(2) dismiss or grant the motion or petition; 

(3) suppress a claim or defense; 
(4 1 exclude evidence; or 

(5) impose some combination of these sanc- 
tions or other appropriate sanction. 

Authority G.S. I43B-I0; I43B-13S; 143B-181.1; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Pari 74. Appendix G. 

.0117 MOTIONS 

An application for an order shall be by written 
motion unless made during a hearing or other- 
wise specified in these Rules. Written motions 
shall be filed and served upon all parties not less 
than ten days before the hearing, unless otherwise 
specified in these Rules. 

Authority G.S. I43B-I0: 143B-138; 143B-181.1; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R.. Pari 74, Appendix G. 

.01 18 CONTINUANCES AND EXTENSIONS 
OF TIME 

The Hearing Officer may grant continuances 
and extensions of time to file only in compelling 
circumstances and with due regard for the inter- 
ests of justice and the orderly and prompt con- 
duct of the proceedings. A request for 
continuance may be made in writing or by 
phone, but must be received by the Hearing Of- 
ficer no later than 5:00 p.m. two days prior to the 
date of hearing. A request for extension of time 
in which to file a document may be made in 
writing or by phone, but must be received by the 
Hearing Officer no later than 5:00 p.m. two days 
prior to the date the document is due. 

Authority G.S. 143B-/0; I43B-I3S; I43B-18I.I; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R.. Pari 74, Appendix G. 

.0119 TIME 



Unless otherwise provided in these Rules or in 
a specific statute, time computations in a decision 
review hearing conducted by the Division shall 
be governed by G.S. 1A-1, Rule 6. 

Authority G.S. 143B-I0; 143B-138; 143B-181.1; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Part 74, Appendix G. 

.0120 AUTHORITY OF PRESIDING OFFICER 

The Division Hearing Officer shall preside over 
decision review hearings. The Hearing Officer 
shall have the duty to conduct a fair hearing, to 
take all necessary action to avoid delay, and to 
maintain order. He shall have all powers neces- 
sary to these ends, including (but not limited to) 
the power to: 

(1) issue notices, orders and like documents; 

(2) rule on motions and other procedural 
matters pending before him; 

(3) administer oaths and affirmations; 

(4) receive, rule on, exclude or limit evidence; 

(5) fix the time for filing and responding to 
motions and other documents not otherwise 
fixed by these Rules; 

(6) fix or adjust the date, time and place of 
hearing; 

(7) hold conferences to settle, simplify, or fix 
the issues in a proceeding, or to consider 
other matters which may aid in the expe- 
ditious disposition of the proceeding; 

(8) require parties to state their position with 
respect to the various issues in the proceed- 
ing; 

(9) examine witnesses and direct witnesses to 
testify; 

(10) issue final decisions; and 

(11) take any action otherwise directly or im- 
pliedly authorized by these Rules. 

Authority G.S. I43B-10; 143B-138; 1 43 B- 18 1.1; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Pari 74, Appendix G. 

.0121 FINAL DECISION 

If the Division conducts a hearing as requested 
by petition, and the matters in dispute are not 
dispensed with through agreement, dismissal or 
otherwise prior to the conclusion of the hearing, 
then the Hearing Officer shall prepare a fmal 
written decision within 30 days of the date of 
hearing and serve copies of the fmal decision 
upon the parties. 

Authority G.S. J 43 B- 10; I43B-I38; 143 B- 1 8 1.1 ; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Part 74, Appendix G. 



236 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



.0122 APPEALS TO COMMISSIONER 
ON AGING 

If an applicant under Rule .0103 (b)(3) makes 
a timely request for hearing with the state Divi- 
sion of Aging, and the Division hears the case 
and issues a written decision denying the appli- 
cant's designation as a planning and service area; 
then the applicant may appeal the denial to the 
Commissioner on Aging in Washington, D.C. 
The appeal must be in writing and must be made 
within 30 days following receipt of the state's 
hearing decision. 

Authority G.S. 143B-10; 143B-13S; 143B-18I.I; 
42 U.S.C., Sec. 3027(a)(5); 45 C.F.R., Part 
1321; 45 C.F.R., Part 74, Appendix G. 

SECTION .0200 - BIDDING AND 
CONTRACTING 

.0201 BIDDING AND CONTRACTING 
PROCEDURES 

Service bid, contract, and grant procedures shall 
be governed by G.S. Chapter 143, Art. 8, where 
applicable, as well as 42 U.S.C., Sec. 3001, et. 
seq., 45 C.F.R. Part 1321. and the procedures 
contained in 45 C.F.R., Part 74, as well as Ap- 
pendix G of the same Part, more particularly de- 
scribed as OMB Circular A- 102. The aforesaid 
regulations are incorporated herein by reference 
pursuant to G.S. 150B- 14(c). 

Authority G.S. 143B-10; 143B-J3S; 143B-1S1.1; 
42 U.S.C., Sec. 3021, 3022(1), 3025(c) and 
3027(a)(7); 45 C.F.R., Part 1321; 45 C.F.R. , 
Part 74, Appendix G. 

****************** 



lyotice is hereby given in accordance with G.S. 
150B-I2 that the Department of Human 
Resources; Division of Medical Assistance intends 
to amend the regulation cited as 10 NCAC 26 H 

.0104(d) (15). 

1 he proposed effective date of this action is Oc- 
tober 1, 1988. 

1 he public hearing will be conducted at 1:30 
p.m. on July 15, 1988 at \'orth Carolina Division 
of Medical Assistance, 1985 Umstead Drive, 
Room 201, Raleigh, N.C. 27603. 



Co 



omment Procedures: Written comments con- 
cerning this amendment must be submitted by July 
15, 1988 to: Director, Division of Medical Assist- 
ance, 1985 Umstead Drive, Raleigh, N.C. 27603. 



Oral comments may be presented at the hearing. 
In addition, a fiscal impact statement on this rule 
amendment is available upon written request from 
the same address. 

CHAPTER 26 - MEDICAL SERVICES 

SUBCHAPTER 26H - REIMBURSEMENT PLANS 

SECTION .0100 - REIMBURSEMENT FOR 

SKILLED NURSING FACILITY AND 

INTERMEDIATE CARE FACILITY SERVICES 

.0104 COST REPORTING: AUDITING 
AND SETTLEMENTS 

(d) The specific cost reporting guidelines re- 
lated to this plan are set forth in the following 
paragraphs. The state will publish guidelines, 
consistent with the provisions of this plan, con- 
cerning the proper accounting treatment for 
items described in this Rule as related operating 
expenses. These guidelines will be issued prior 
to April 1, 1985. The guidelines may be subse- 
quently modified prior to the beginning of each 
cost reporting period. In no case, however, shall 
any modifications be applied retroactively. A 
provider should request clarification in writing 
from the state if there is uncertainty about the 
proper cost center classification of any particular 
expense item. 

( 15) Direct Service Contracts. If a facility 
provides any one or a portion thereof of 
the services listed below under contract 
with an outside vendor the contract cost 
shall be allocated 70 percent to the direct 
cost center and 30 percent to the A & G 
cost center. To avoid this allocation the 
facility and vendor may provide the state 
agency with a detailed, auditable state- 
ment (in a format similar to that of the 
home office cost report) detailing the 
vendor's costs for the service. The agency 
shall under such circumstances have the 
right to audit the vendor's books to verify 
its statement. The verified statement can 
be used as the basis for allocating the 
vendor's charges to the provider between 
the direct and indirect cost centers. The 
services included under this provision are: 
nursing, dietary, social services and patient 
activities. 

Authority G.S. 108A-25(b); 108A-54; 108A-55; 
S.L. 1985, c. 479, s. 86; 42 C.F.R. 447, Subpart 
C. 

TITLE II DEPARTMENT OF 
INSURANCE 



NORTH CAROLINA REGISTER 



237 



PROPOSED RULES 



Nc 



otice is hereby given in accordance with G.S. 
I SOB- 1 2 that the Department of Insurance intends 
to adopt regulations cited as 1 1 NCAC 6B .0101 
- .0105. .0201 - .0205, .0301 - .0304, .0401 - .0403. 

I he proposed effective date of this action is Oc- 
tober 1, 19SS. 

1 he public hearing will be conducted at 10:00 
a.m. on July 20, 1988 at Hearing Room, Third 
Floor, Dobbs Building. 430 N. Salisbury Street, 
Raleigh, N.C. 276/1. 



Cc 



omment Procedures: Written comments 
should be directed to Fran DiPasquantonio at 
P.O. Box 263S7, Raleigh, N.C. 27611. He may 
be reached by telephone at (9/9) 733-4700. Oral 
comments may be made at the hearing. 

CHAPTER 6 - AGENT SERVICES DIVISION 

SUBCHAPTER 6B - THIRD PARTY 
ADMINISTRATOR 

SECTION .0100 - DESCRIPTION OK FORMS 



.0101 APPLICATION FORM 

The application form designated as TPA-1-87 
shall include, but not be limited to, the following 
information: 

(1) administrator's name; 

(2) location of North Carolina office; 

(3) type of entity of the administrator; 

(4) administrator's federal identification num- 
ber; 

(5) administrator's registration in other states; 

(6) name of the administrator's errors and 
omission company; 

(7) signature of officers. 

Statutory Authority G.S. 58-9: 58-536. 

.0102 BIOGRAPHICAL AFFIDAVIT 

The biographical affidavit for administrators 
shall include, but not be limited to, the following 
information: 

( 1) full name and address of administrator; 

(2) affiant's social security number; 

(3) affiant's date and place of birth; 

(4) affiant's residence address; 

(5) affiant's business address; 

(6) affiant's business telephone number; 

(7) affiant's present or proposed position with 
the administrator; 

(8) affiant's employment record for the past 
five years; 



(9) whether the affiant has ever been in a po- 
sition which required a fidelity bond or has 
been denied a fidelity bond; 

(10) affiant's education; 

(11) affiant's membership in professional soci- 
eties and associations; 

(12) the name of any insurance company in 
which affiant controls directly or indirectly, 
or owns legally or beneficially ten percent 
or more of the outstanding stock (in voting 
power); 

(13) the names of members of affiant's imme- 
diate family who subscribe to or own, bene- 
ficially or of record, shares of stock of 
applicant administrator or its affiliates and a 
description of such holdings; 

(14) whether affiant has ever been refused a 
professional, occupational, or vocational li- 
cense by any public or governmental agency 
or regulatory authority, or whether such li- 
cense held has ever been suspended or re- 
voked; 

(15) whether affiant has ever been adjudged 
bankrupt; 

(16) whether affiant has ever been convicted, 
or has had a sentence imposed or suspended, 
or has been pardoned for conviction of or 
pleaded guilty or nolo contendere to an in- 
dictment charging any crime involving fraud, 
dishonesty or moral turpitude, or charging a 
violation of any corporate securities statute, 
or any insurance law, or has been subject of 
any disciplinary proceeding of any federal 
or state regulatory agency; 

( 1 7) whether affiant has ever been an officer, 
director, manager, trustee, or controlling 
stockholder of any company during which 
time the company became insolvent or was 
placed under supervision or in receivership, 
rehabilitation, liquidation or conservator- 
ship; 

(18) whether the certificate of authority or li- 
cense to do business of any insurance com- 
pany of which affiant was an officer has ever 
been suspended or revoked while the affiant 
was an officer of such company. 

Statutory Authority G.S. 58-9: 58-536. 

.0103 TPA TRANSMITTAL 

The TPA transmittal form (TPA-3-87) is de- 
signed as a check list to assure that all informa- 
tion required is submitted. The following 
information is required: 

(1) application for administrator's registration 
(TPA-1-87); 

(2) biographical form, (TPA-2-87), must be 
completed by every officer of a corporation 



23S 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



or ever)' partner of a partnership or the 
owner and operating manager of a sole pro- 
prietorship; 

(3) copies of each type of service contract uti- 
lized by the third party administrator with 
its benefit plans for North Carolina resi- 
dents; 

(4) certified, reviewed or compiled financial 
statements which must include a balance 
sheet, a statement of income and a statement 
of changes in financial position for the ad- 
ministrator's most recent full fiscal year (fi- 
nancial statements for parent companies of 
third party administrators are not accepta- 
ble); 

(5) a copy of the fidelity bond in an amount 
of surety of one hundred thousand dollars 
($100,000) or more on the third party ad- 
ministrator written by a company duly li- 
censed or authorized to do business in North 
Carolina; 

(6) company check, certified check or money 
order in the amount of twenty dollars 
($20.00) registration fee payable to the 
North Carolina Department of Insurance; 

(7) narrative description of the third party ad- 
ministrator's operations in North Carolina; 

(8) signature, date, address and telephone 
number of the preparer of the application 
package. 



the last filing and, if so, a biographical affi- 
davit for new administrators (TPA-2-87); 

(3) a list of all new service contracts (self- 
funded, or fully insured) entered into since 
the last application; 

(4) certified, reviewed or compiled financial 
statements which must include a balance 
sheet, a statement of income, and a state- 
ment of changes in financial position for the 
administrator's most recent full fiscal year 
(financial statements for parent companies 
of third party administrators are not accept- 
able); 

(5) a copy of the fidelity bond in an amount 
of surety of one hundred thousand dollars 
($100,000) or more on the third party ad- 
ministrator written by a company duly li- 
censed or authorized to do business in North 
Carolina; 

(6) narrative of description of the third party 
administrator's operations in North Caro- 
lina; 

(7) company check, certified check or money 
order in the amount of twenty dollars 
($20.00) registration fee payable to the 
North Carolina Department of Insurance; 
and 

(8) signature, date, address, and telephone 
number of the preparer of the application 
package. 



Statutory Authority G.S. 58-9; 58-536. 

.0104 RENEWAL APPLICATION FORM 

The renewal application form (RTPA-1-88) is 
designed to obtain basically the same information 
as the application form (TPA-1-87). The fol- 
lowing information is called for: 

(1) administrator's name; 

(2) location of North Carolina office; 

(3) administrator's registration in other states; 

(4) name of the administrator's errors and 
omission company; and 

(5) signature of officers. 

Statutory Authority G.S. 58-9; 58-536. 

.0105 RENEWAL TPA TRANSMITTAL 

The renewal TPA transmittal form 
(RTPA-2-88) is similar to the TPA transmittal 
form (TPA-3-87) and must contain the following 
information: 

(1) any change of address in location of the 
third party administrator's North Carolina 
office; 

(2) any changes in ownership of the third party 
administrator or, any new officers, or addi- 
tion or deletion of any new partners since 



Statutory Authority G.S. 58-9; 58-536. 

SECTION .0200 - REGISTRATION 

.0201 CONTENTS OF FLLL APPLICATION 

All applications for a third party administrator 
certificate of registration must include: 

(1) an application for administrator's registra- 
tion (TPA-1-87) signed by an officer, if a 
corporation, or every partner, if a partner- 
ship, or the owner and operating manager, 
if a sole proprietorship; 

(2) biographical foim(s) (TPA-2-87) com- 
pleted by every officer, partner, or owner 
and operating manager as indicated; forms 
may be duplicated to meet needs; 

(3) copies of each type of service contract uti- 
lized for benefit plans administered covering 
North Carolina residents; 

(4) financial statements for the most recent 
fiscal year prepared by an independent certi- 
fied public accountant (financial statements 
for parent companies of third party admin- 
istrators are not acceptable); 

(5) a copy of a fidelity bond issued to the ap- 
plicant in the amount of one hundred thou- 
sand dollars ($100,000) or more in the name 



NORTH CAROLINA REGISTER 



239 



PROPOSED RULES 



of the third party administrator issued by a 
company licensed or authorized to do busi- 
ness in North Carolina (a copy of the policy 
is required); 

(6) all basic organizational documents of the ' 
third party administrator, such as the articles 
of incorporation, bylaws, partnership agree- 
ments and all other similar documents and 
all amendments to those documents; 

(7) a description of the third party adminis- 
trator, its services, faculties and personnel; 

(8) a power of attorney duly executed by the 
third party administrator, if not domiciled in 
North Carolina, appointing the commis- 
sioner of insurance, and the commissioner's 
duly authorised deputies as attorneys for the 
third party administrator in and for this 
state, upon whom process in any legal action 
or proceeding against the third party admin- 
istrator on a cause of action arising in this 
state may be served; 

(9) a company check, certified check, or mo- 
ney order in the amount of twenty dollars 
($20.00), registration fee. pavable to the 
North Carolina Department of Insurance; 
and 

(10) such other information as the department 
may reasonably require. 

Statutory Authority G.S. 58-9; 58-525; 58-527; 
58-529; 58-532; 58-536. 

.0202 MODIFICATION OF APPLICATION 

Within 30 days following a significant modifi- 
cation of any of the information submitted with 
an application for a certificate of registration, the 
third party administrator shall file a notice of the 
modification(s) with the agent sendees division. 

Statu: on- Authority G.S. 58-9; 58-525; 58-527; 
58-529;' 58-532; 58-536. 



(2) all changes to the information contained in 
biographical form(s) (TPA-2-87); 

(3) all changes or additions to ownership, or- 
ganizational structure or location of the third 
party administrator; 

(4) all changes or additions to the service con- 
tracts entered into by the third party admin- 
istrator; 

(5) certified or reviewed or compiled financial 
statements for the most recent fiscal year 
prepared by an independent certified public 
accountant (financial statements for parent 
companies of third party administrators are 
not acceptable); 

(6) a copy of a fidelity bond issued to the ap- 
plicant in the amount of at least one hun- 
dred thousand dollars ($100,000) in the 
name of the third party administrator issued 
by a company licensed or authorized to do 
business in North Carolina (a copy of the 
policy is required); 

(7) a company check, certified check, or money 
order in the amount of twenty dollars 
($20.00), renewal registration fee, payable to 
the North Carolina Department of Insur- 
ance. 

Statutory Authority G.S. 58-9; 58-525; 58-527; 
58-529; 58-532; 58-536. 

.0205 RENEWAL CERTIFICATE OF 
REGISTRATION 

The renewal date for all certificates of registra- 
tion will be September 1. Renewal packages will 
be sent to registered third party administrators 
on July 1 and should be returned to the Depart- 
ment of Insurance, Agent Services Division, Ad- 
ministrative Assistant, P.O. Box 26387, Raleigh, 
N.C. 27611, no later than August 10. 

Statutory Authority G.S. 58-9; 58-536. 



.0203 DURATION OF INITIAL CERTIFICATE 
OF REGISTRATION 

The initial certificate of registration will author- 
ize the third party administrator to operate in 
North Carolina from the date of issue until Au- 
gust 31 next following the date of issue. The fee 
of twenty dollars ($20.00) will not be pro-rated. 

Statutory Authority G.S. 58-536; 59-9. 

.0204 APPLICATION FOR RENEWAL OF A 
CERTIFICATE OK REGISTRATION 

All applications for renewal of a certificate of 
registration must include: 
( 1 ) application for administrator's renewal reg- 
istration (RTPA-1-S8); 



SECTION .0300 - FINANCIAL REQUIREMENTS 

.0301 FINANCIAL STATEMENTS 

All applicants for a certificate of registration 
must file financial statements with their initial 
and renewal applications. These financial state- 
ments must be for the third party administrator 
seeking registration. Financial statements for 
parent companies of the third party administrator 
are not acceptable for registration. The financial 
statements must report the financial position, re- 
sults of operations, and a statement of cash flows 
for the third party administrator. The financial 
statements must be certified or reviewed or com- 
piled by an independent certified public account- 
ant. A copy of the applicant's financial 



240 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



statements for the most recent fiscal year shall 
satisfy this requirement unless the department 
determines that additional or more recent finan- 
cial information is required. 

Statutory Authority G.S. 58-9; 58-536. 

.0302 DETERMINATION OF FINANCIAL 
RESPONSIBILITY 

In determining the financial responsibility of an 
applicant for a certificate of registration, the de- 
partment requires that an applicant be solvent. 
In addition, the department will consider, among 
other things: 

(1) liquidity, and 

(2) any internal controls the applicant may 
have in place to afford protection for benefit 
plans, which may include, but are not lim- 
ited to, the manner in which benefit plan 
fund accounts are established. 

Statutory Authority G.S. 58-9; 58-532; 58-536. 

.0303 FINANCIAL INFORMATION PUBLIC 
RECORDS 

All financial information filed in support of an 
application for initial issuance or renewal of a 
certificate of registration will be subject to the 
public records law of North Carolina. Such in- 
formation will not be released by the department 
until registration is accomplished and a certificate 
issued. In the event that the application is with- 
drawn from consideration by the applicant, then 
it will not be deemed public information. 

Statutory Authority G.S. 58-9; 58-11; 132-6. 

.0304 FIDELITY BOND ISSUED BY 
LICENSED COMPANY 

The fidelity bond required by G.S. 58-536(b) 
must be issued by an insurance company licensed 
or authorized to do business in North Carolina. 
Such bond must be issued in the name of the 
third party administrator and provide for notifi- 
cation to the Department of Insurance 30 days 
in advance of any termination, or increase or de- 
crease in the amount thereof. A copy of the 
policy is required to be filed with the department. 



Statutory Authority 
58-536. 



G.S. 58-9; 58-15; 58-29; 



SECTION .0400 - GENERAL PROVISIONS 

.0401 SERVICE CONTRACTS WITH 
INSURANCE COMPANIES 

All service contracts with insurance companies 
must be with insurers licensed or authorized to 
operate in North Carolina. 



Statutory Authority G.S. 58-9; 58-15; 58-527. 

.0402 ADJUSTING CLAIMS BY THIRD PARTY 
ADMINISTRATORS 

No adjuster's license will be required of persons 
acting for third party administrators in adjusting 
claims for life, accident and health and annuity 
claims or self-funded health benefit plans. 

Statutory Authority G.S. 58-9; 58-529; 58-533; 
58-61 1(b). 

.0403 VIOLATIONS: PENALTIES 

The department shall follow the provisions of 
G.S. 58-9.7 for the imposition of civil penalties 
against any third party administrator that does 
not obtain a certificate of registration prior to 
beginning its operations in this state in accord- 
ance with Article 41 of the North Carolina Gen- 
eral Statutes. 

Statutory Authority G.S. 58-9; 58-9.7; 58-536. 

TITLE 15 - DEPARTMENT OF NATURAL 

RESOURCES AND COMMUNITY 

DEVELOPMENT 

IVotice is hereby given in accordance with G.S. 
150B-12 that the Department of Natural Re- 
sources and Community Development intends to 
adopt regulations cited as 15 NCAC 2L .0106 - 
.0114; amend regulations cited as 2L .0/01 - 
.0104, .0201 - .0202, .0301 - .0302, and .0319; and 
repeal regulation cited as 2L .0105. 

J he proposed effective date of this action is 
January 1, 1989. 

1 he public hearing will be conducted at 7:00 
p.m. at: 

ASHEV1LLE 

July 26, 1988 

Humanities Lecture Hall 

UNC-Asheville 

RALEIGH 

July 28, 1988 

Ground Floor Hearing Room 

Archdale Building 

512 N. Salisbury St. 

NEW BERN 

August 2, 1988 

Building C, Room C-15 

Craven County Community College 



NORTH CAROLINA REGISTER 



241 



PROPOSED RULES 



C omment Procedures: Oral comments may be 
made at a hearing, or written statements may be 
submitted to the agency prior to September I , 
1988. Written copies of oral statements exceeding 
three minutes are requested. Oral statements may 
be limited at the discretion of the hearing officers. 

CHAPTER 2 - ENVIRONMENTAL 
MANAGEMENT 

SUBCHAPTER 2L - GROUNDWATER 
CLASSIFICATION AND STANDARDS 

SECTION .0100 - GENERAL CONSIDERATIONS 

.0101 AUTHORIZATION 

<& N.C. General Statute 143-214.1 directs that 
the Commission develop and adopt after proper 
study a series of classifications and standards 
which will be appropriate for the purpose of 
classifying each of the waters of the state in such 
a way as to promote the policy and purposes of 
the act. Pursuant to this statute, the Regulation - ; 
ef rules in this Subchapter establish a series of 
classifications and water quality standards appli- 
cable to the underground waters groundwaters 
of the state. 

(b) Those Regulations im4 the standards they 
establish apply te aH clarified und e rground wa- 
ters? Many common activities take place m ef 
n e ar -' hallow subsurfac e waters with He resulting 
violation 8$ GA groundwater quality standards 
afte it » the intention ef these Regulations that 
these activitie s ) continue unimpeded except whore 
specific problems afe identified eft a ease by- ease 
basis. Those activities include: 

f4+ the agncultural operation ;, ef applying 
fertilizer, herbicide ;. , ef pesticides te crop 
land -, ef pasture ;. , aee the raiding ef live 
'■ t u ck - 
f5^ silvicultural fertilizer, herbicide ef pesticide 
application; hom e »f commercial forti 
li/or, pesticide, ef herbicide application; 
(e) structural pest control activities when 
conducted according te label direction? . ; 

(4} subsurface ef surface municipal, industrial, 
ftft4 dome - otic waste disposal activities ef 
other activities which may affect under 
ground waters when these systems afe m- 
stalled ««4 operated ef conducted 
according te regulations established by- the 
Departments ef Human Resources, Agn 
cultur e , B* Natural Resources aee Com 
m unity Development. 
A* u -. ed herein, the phrase 



'specific prob 



l e ms" shall mean a set »f facts »f circumstances 
which show w-ttb a reasonable certainty that eee 



; | iln 1 l j-v r ii ill nvl.t ■ r\ t fa-Q 
l„ Jl_l J I „T UI TT 1 II ^^TTHK TTT I 1 It? 



f TT 1 I 1 1 ' 1 \J \r I 1 1 IV 

forese e abl e future: 

(44 A» existing ef probable violation ef GA 

groundwater standards; 
f3+ ¥he e xist e nce er probability ef a violation 
ef ftfty- other environmental standard ef 
r e gulation; 
fr34 A throat te human hfe? health, ef safety; 
f44 A throat te the onvironmont. 
(4) 44** regulations established » this Sub 

11 RXpTvI HI ^ rTTTCTTnr^ IT_T m^TTTTTTITTT CTTTCT I'H. ^TlTT^ TttV 

quality ef the subsurface an4 groundwaters, pfe- 
ye»t aft4 abate pollution aft4 contamination, 
protect public health, ft«4 permit management 
ef the groundwaters fef their best usage by- the 
citizens ef North Carolina, it is the policy ef the 
I 'NIC that the best usage ef the groundwater ef 
the state is as a sourc e ef drinking water » its 
ambient state. Those groundwaters generally are 
a potable source ef drinking water without the 
necessity ef treatment. ft is the intent ef these 
Regulations te protect the overall high quality 
ef North Carolina's groundwaters atta te eft- 
hanoe aee restore the quality ef degraded 
groundwaters te the level established by- the 
standardo wherever practicable. 

Statutory Authority G.S. 143-214.1; 143-214.2; 
143-2 1 '5.3(a)(1); I43B-282. 

.0102 DEFINITIONS 

The definition of any word or phrase used in 
these regulations Rules shall be the same as given 
in G.S. 143-213 except that the following words 
and phrases shall have the following meanings: 

which may caus e the wat e r te be unpleasant 
te taste, ef unsightly, »f otherwis e renders 
the water unsuitable fef human consump 

( 1 ) "Alternate contaminant concentration" 
means the allowable concentration of a 
contaminant, in excess of water quality 
standards, as established for restoration ac- 
tivities. 

(2) "Bedrock" means any consolidated or co- 
herent and relatively hard, naturally-formed 
mass of mineral matter which cannot be 
readily excavated without the use of ex- 
plosives or power equipment. 

( 3 )(33}" Commission" shall m e an means the 
Environmental Management Commission 
as organized under General Statute Section 
H3B~28:, etsee. G.S. 143B. 
(5e) "Lund Surface" fef the purpose ef deter 
mining the location ef Gft w - at e rs shall be 
the existing contour ef the earth, wheth e r 
the natural contour ef artificially altered hv- 



242 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



excavation. 1« the ease ef a» alteration ef 
the e xisting k-*«4 surface hy the addition ef 
hlf material, the la»4 surface is the natural 

i'.if\t(\i ir ti T tl^fi iZk-~t w*t It r i f | ^ ^vjt-4^^1 nil lit- <■ j--i urin 
CTTTTTTCTr \J I C 1 IV- E7T L 1 L 1 1 UU IT U AJ >J 1 \.TJ l 'I II TT T\J HI I T 

alteration. Where it is determined that a 
person ha* intentionally altered the ourfaco 
ef the e arth fof the purpose ef e vading the 
r e gulations a«4 standards contained i» this 
Subchapter, the phrase, "land surface" shall 
mean the contour ef the e arth that e xist e d 
prior te such activity. 
(4)f3»fr Perimeter ef "Compliance boundary" 
means a boundary' around a disposal system 
at and beyond which water quality standards 
may not be exceeded and only applies to fa- 
cilities which are applying for or have re- 
ceived a permit from the [Division of 
Environmental Management under G.S. 



143-215.1. or for disposal systems permitted 
by the Department of Human Resources. 
shall mean the locus ef ah points m the vef- 
ti«4 plane extending downward from the 
points ef complianc e surrounding a point 
ef discharge. 

(4) Micrograms pef htef (ugd) gives the weight 
i» micrograms ef am- constituent m e«ehtef 
ef solution. 

(4) Milligram ', pef htef (mg. 1) is the weight if> 
milligrams ef arty- sp e cific constituent ef 
constituents at a htef ef the solution. 

( 5 )(34f' Director" shall mean means director of 
the Division of Environmental Manage- 
ment. 
(6)(4f' Fresh groundwaters" afe means those 
groundwaters having a chloride concen- 
tration equal to or less than 250 milligrams 
per liter. 

(?) Naturally occurring concentration moans 
the concentration ef chemical ef biological 
substances ef physical charact e ristics which 
exist naturally a«4 which have set been 
changed hy man's activities. 

(7)ffo"Groundwatcrs" afe means those waters 
in the saturated zone of the earth. 

(44 Infiltration water means the water that m- 
filtrates ef moves tftte- the subsurface ef ee- 
eafs between the land surface aa4 the tef> 
ef the saturated zono ef s e rv e s te recharg e 
groundwaters. 

(8) "limit of dctectability" means the method 
detection limit established for the U.S. FPA 
approved test procedure providing the low- 
est method detection limit for the substance 
being monitored. 

(9)(£)" Natural quality conditions" means the 
physical, biological, an4 chemical and radi- 
ological conditions quality which occurs na- 



turally, and which has net boon changed 
hy- man's activities. 
(£) Parts pef million (ppm) aa4 parts pef hif- 
he» (ppb) shall he construed te- he e quiv 
alont te- milligrams pet htef a«4 micrograms 
pef liter, rospoctivoly. 

(34} "Point ef Complianco" shall he the point 
at the te«4 surfac e at which penalties und e r 
G&r 113 211.6(a)(1)(b) may be impoood fef 
a violation ef apphcablo underground wat e r 
quality standards. (See Rule .0103(h) el this 
Subchapter). 

(44) Point ef dischargo ef outlet is the point 
ef initial contact ef waste with the e xisting 
soil ef rock materials. 

(10) (44)" Potable waters" afe means those wa- 
ters suitable for drinking, bv humans, culi 
nary and food proc e ssing purpos e s. 

(ll) (4-3)"Saline groundwaters" afe means those 
groundwaters having a chloride concen- 
tration of more than 250 mg/1. 

( 12) ( 13)Th e saturated "Saturated zone" is means 
that part of the wat e r bearing consolidat e d 
a«4 unconsolidated formations subsurface 
below the water table in which all the inter- 



connected voids are fdled with water under 
pressure at or greater than atmospheric. It 
docs not include the capillary fringe. 
(444 Subsurface m e ans the afea beneath the 

i hi in m i iulv hi iii 1 1 in t 1 1 t \ i hi j rr^r t^tt rTtTT i n 

the saturated zon e . 

(44) Subsurface waters afe those waters occur 
riftg i» the subsurfaco a»d include ground 
waters aa4 infiltration watoro. 

(44) Toxic substances shall mean those sub 
stanc e s which if ing e sted ef assimilated i«te- 
any organism either directly ef indirectly 
waff cause d e ath, disease, behavioral abnor 
malitios, cancor, genetic mutations, physio 
logical malfunctions (including malfunctions 
i» such organisms ef th e ir offspring). 

(13) "Suitable for drinking" means a quality 
of water which does not contain substances 
in concentrations which, either singularly or 
in combination if ingested into the human 
body, will cause death, disease, behavioral 
abnormalities, congenital defects, genetic 
mutations, or result in an incremental life- 
time cancer risk in excess of 1 x 1 6 t or ren- 
der the water unacceptable due to aesthetic 
quahties, including taste, odor and appear- 
ance. 

/ I / \ I li. i l 1 i-i I 'it I ir'il.^il ir\n,i i Q tl-i,i «-t , i «-t i , t r t . i t i I \ ■_* 

T ~ij TTTU U 1 1 TTI I II I UH.TJ J.UIll. r^ 1 1 ll. 1 TTTTTTTTTTT ITT I TTV 

consolidated and unconsolidated formations 
between land surface a»4 the water table. 
It includes the capillary fringe. 



/WORTH CAROLINA REGISTER 



243 



PROPOSED RULES 



{ 14) "Waste houndarv" means the horizontal ards within boundaries established in accordance 

with the rules of this Subchapter. fo keeping 
with the overall policy of the BMC to protect, 
maintain, a»4 enhance wat e r quality within the 
State of North Carolina, the EN1C The commis- 
sion will not approve any project of ( 



perimeter of the permitted waste disposal 
area. 

(15) f44>i" Water table" is means the surface of 
the saturated zone m the unconfinod wa- 
tor bearing formation of material below 
which all interconnected voids are filled with 
water and at which the pressure is atmo- 
spheric. 

(40-)' Thermal wast e fef purposes el ground wa 
tef quality means discharges having a torn 
peratur e which is fo excess of 3t> degrees 
Eahronhoit above of b e low the naturally 
occurring temperatur e of the receiving 
groundwater as determined by- the director. 

(-24)4 Underground waters means aH waters fo 
the subsurface including infiltration a«4 
groundwaters. 

(4+4 "Person" shall mean smy individual, ©fo- 
priotorship, partnership, joint venture, eof- 
poration, of a&f other entity, of any 
employee, designee, agent , of representative 
h+ aoy official capacity empowered to set fo 
behalf of that entity with laiow ledge of that 
entity, either express of implied. 



Statutory Authority G.S. 
143-215(a)(l); 143B-282. 



143-214.1; 



.0103 POLICY 

(a) The discharg e of <my wastes to the subsur 
fate of groundwaters of the state by means of 
wells is prohibited. The rules established in this 
Subchapter are intended to maintain and preserve 
the quality of the groundwaters, prevent and 
abate pollution and contamination of the waters 
of the state, protect public health, and permit 
management of the groundwaters for their best 
usage by the citizens of North Carolina. It is the 
policy of the commission that the best usage of 
the groundwaters of the state is as a source of 
drinking water. These groundwaters generally 
arc a potable source of drinking water without 
the necessity of treatment. It is the intent of 
these Rules to protect the overall high quality of 
North Carolina's groundwaters and to enhance 
and restore the quality of degraded groundwaters 
to the level established by the standards, wher- 
ever practicable. 

(b) (§4 It is the intention of the Environmental 
Management Commission to protect all the oh- 
derground waters existing below a depth ef 34> 
feet beneath the surface of the faffo groundwaters 
to a level of quality at least as high as that re- 
quired under the standards established in Rule 
.0202 of this Subchapter. I lowevcr, the com- 
mission may permit degradation of groundwater 
quality below the level of the applicable stand- 



disposal system subject to the provisions of G.S. 
143-215.1 which would result in the significant 
degradation of groundwaters whoso e xisting 
quality is bettor than the assigned standard, a vi- 
olation of the water quality standards bevond the 
boundaries of the property on which the source 
of pollution is located, or which would result in 
the impairment of existing groundwater uses or 
would adversely impact the public health, safety, 
or welfare, unless such degradation is found to 
be economically an4 socially justifiable, affo fo 
the best public interest. U is within the authority 
a«4 i» keeping with the policies of the EMC to 
decline to allow degradation from the e xisting 
background quality of a» underground water 
source down to the l e v e l of the standard without 
such social aod- e conomic justification. Prior to 
the approval of aft¥ project of development 
which will result fo the significant degradation of 
groundwater quality, the EMC wiH solicit, 
through public notice, of public h e aring, of both, 
comments from the public a«4 governmental 
ag e ncies relative to the project of development 
*h4 anticipated underground water quality de- 
gradation. 

"(e> 1« addition te the GrV GSAr GU, G£R 
classifications assigned to underground waters as 
a provision of this Subchapter, the director is 
authorised te designate such underground waters 
"restricted' - (RS) under any of the following eif- 
cumstancos: 

(4-) Whore underground waters contain toxic 
of del e terious substances ift excess of the 
maximum allowable concentrations es- 
tablished under this Subchapt e r, aftd- Fes- 
toration of treatment ea» be shown to be 
t e chnologically aft4 economically feasible. 
(44 Where a statutory variance has boon 
grant e d fof the und e rground wat e rs as 
provid e d is Paragraph (4+ of this Rule. 
(4+ Whore underground waters contain na- 
turally occurring concentrations i» excess 
©4 the standards established under Rule 
.0202(b) of this Subchapter whether of 
net restoration of treatment is feasible, 
bot provid e d that restoration fof naturally 
occurring e xc e ss concentrations may »©t 
be required of afty person as a result of 
this designation. 
(4+ Where underground waters have been de- 
signatod R& under Subparagraph (44 of 
this Paragraph, a«4 whero the sourc e of 



244 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



contamination atfo foe r e sponsible person 
aft* identified, a compliance schedule shall 
be issued within 4-3 months fo the under 
ground waters being designated. 

(c) The commission recognizes that the appli- 
cation of fertilizers and other agricultural chemi- 
cals on land used for agricultural or silvicultural 
activities may result in the presence of these 
substances in the underlying groundwaters in 
concentrations exceeding water quality standards, 
as established iri Rule .(1202 of this Subchapter, 
because of a seasonally high or fluctuating water 
table. The presence of these substances in con- 
centrations in excess of water quality standards 
shall not be considered a violation if thev result 
from applications made in accordance with label 
instructions, where applicable, or accepted agro- 
nomic practices, and do not occur in concen- 
trations exceeding the water quality standards 
bevond the boundary of the property on which 
they were applied or below a depth of ten feet 
below land surface. 

ffo A»y person subject to foe provisions fo 
General Statut e 1 - 13 215. 1 may apply to the 
PMC fof a vanance from foe groundwater clas 
sificationo affo quality standards established fmf- 
suant to these Regulations affo North Carolina 
General Statut e M J 2M. 1. A variance f»ay be 
granted by foe commission pursuant to the re- 
quiroments fo North Carolina General Statute 
113 215.3(e). Tfoe burden fo proof h* am- public 
hearing ©f oth e r proceeding pursuant to North 
Carolina General Statute 113 215.3(e) shall be 
upon toe applicant fof a vanance. >fo variance 
shall be granted to allow toe discharge fo waste 
to the sub surface ©f groundwaters fo toe stat e by 
m e ans fo w e lls ©f fof a» ext e nsion ©f expansion 
fo foe p e rim e t e r fo complianc e as established 
pursuant to foe regulations fo fots Subchapter. 

(d) ffo No person shall conduct or pennit an 
activity which causes cause the concentration of 
any toxic ©f deleterious substances substance, to 
exceed that specified in Rule .0202 of this Sub- 
chapter, except as authorized by the rules of this 
Subchapter, fo accordance with a complianc e 
schedule authorised by foe director. 

fo) Any person conducting a» activity causing 
©f significantly contributing to foe violation fo 
underground water quality standards may apply 
to foe director fof a compliance schedule, fo 
such cases foe director may authorize - a compli 
ance schedule requiring foe restoration fo foe 
quality fo foe und e rground waters to foe lev e l fo 
foe standard, e* to a level as close to foe appli 
cable standards hereunder as » economically affo 
technologically feasible. fo determination foe 
structure, duration, l e v e l fo compliance, affo fea- 
sibility fo a compliance schedule, foe director 



shall consider foe extent fo a»y violations, foe 
e xt e nt fo a»y threat to human health ©f safety, 
foe e xtent fo damage to foe e nvironment, foe 
total 6©st- fo foe cl e anup involved, foe marginal 
e©st- fo foe cleanup requir e d, further tochnolog 
teal advanoos which might permit such cleanup, 
affo foe public affo oconomic benefit fo r e quiring 
such cleanup. Compliance schedulos fftay be re- 
vised ©f revoked by foe director if foe t e rms fo 
foe compliance schedules afe violated by foe 
person operating thereunder, ©f if additional to- 
formation ©» foe e xtent affo magnitude fo foe 
violation becomes known. Whore is it- deter 
mined foat- there w*» willful &f intentional vfo- 
lation fo foe underground water quality 
standards, foe director shall Hot- grant a compli 
ance schedule prior to instituting foe appropriate 
enforcement provision under G.S. 1 13 21 1.6. 

(e) (f) An activity or source fo pollution disposal 
system operating under and in compliance with 
the terms of a statutory variance or a special or- 
der compliance schodulo established under these 
Regulations is deemed to be in compliance with 
the water groundwater quality standards. 
fo) Perimeter fo Complianc e : Pxisting affo 
Now Facilities. 

fo) P xceedancos fo foe standards established 
fof foe underground waters occurring 
within foe perimeter fo compliance shall 
«©t- be subject to foe penalty provisions 
applicable und e r 1 13 2 15.6(1 )a. 
(3) The commission shall otherwise consider 
underground waters existing within foe 
compliance perimeter to be classified wa- 
tef& fofoe state, affo shall r e quire: 
(A) foat- permits fof all activities governed 
by Gt&t 113 2M.1 wfo be written to pf©- 
teet- foe level fo groundwater quality es- 
tablished by GA standards; 
(43) foat- nocosnary groundwater quality 
monitoring within foe compliance porim 
etef wfo be roquirod; 
(G) foat- a violation fo standards within foe 
compliance perimeter be remedied 
through clean up, recov e ry, containment, 
©f other respons e which foe commission 
determines to be necessary whon any- fo 
foe following conditions occur: 

GA waters occurs ©f ea» be r e asonably 
predict e d to occur considering hydro 
geologic conditions, modeling, ©f other 
availabl e e vid e nc e ; 

(«} a«- imminent hazard ©f threat to foe 
public health ©f safety exists ©f ea» be 
predicted. 
fo) Jtof e xisting facilities, foe complianc e pef- 

imeter shall be established at a distance 



NORTH CAROLINA REGISTER 



245 



PROPOSED RULES 



§QQ feet from *4h* point ef discharge, e* 
t4%e prop e rty boundary, whichever hj k**r 

(-ty 4-w Ht"r¥- facilities, *4*e compliance perimo 
tef '. hull ke establ i shed at the lesse* ef 240 
feet from &e point t»f discharge, ef §0 feet 
within the proporty boundary . 

(4f Nothin g m tto» Rule '. hall be construed to 
prevent the commission from initiating 
enforcement action eves wh e n pollution 
occur ;. sol e ly within tb* complianc e per- 
imeter based upon permit violations, h«- 
mm e nt thr e at to the public h e alth, saf e ty, 
t+F the e nvironm e nt, w violations ef any 
special ord e r issued by- the commission. 
fi} Exemptions. 54+e following activities shall 
h*4 be subj e ct to the regulations ef th+* Sub 
chapt e r: 

(-44 I pconing resulting from water H*e activ 
ttte* conducted under tt«4 m compliance 
with a water H*e permit 

(-24 44*e H*e e-F drilling fluids a* approved ««- 
def the weU construction regulations. 

Statutory Authority G.S. 143-214: 143-214.1; 
143-214.2; 143-21 5.3(e); 143-21 5.3(a) ( 1 ); 
I43B-2S2. 

.0104 RS DESIGNATION 

Tests »f analytical procedures to determine 
compliance w non compliance with the und e r 
ground wat e r quality -. tandards established h* 
Rul e .0202 t+f tht* Subchapter w+h be » accord 
ance v . ith: 
(-44 the method ', desenbed m- Standard Methods 
for the Examination ef Water a»d Wast e 
water, fifteenth e dition. 1980- tm4 the 4-W4- 
supplement thereto: 
(-24 testing, monitoring. t-H* analytical proce 
dures required a* a condition t*f a permit is- 
sued by- the Division e£ Environmental 
Management under N.C.G.S. 113 21 1.1; t*f 
(44 methods approved by- letter from the D+- 
r e ctor t»f the Division e4' Environmental 
Management. 
The director is authorized to designate GA or 
GSA groundwaters as RS under am of the fol- 
low 



trie circumstances: 



( 1 ) Where groundwaters contain concen- 
trations of substances in excess of the water 
quality standards established under this 
Subchapter: 

(2) Where a statutory variance has been granted 



as provided m Rule .01 14 of this Subch 
ter; or 
(3) Where an alternate contaminant concen 



tration has been established bv the director. 



Statutory Authority G.S. 143-214.1; 

l43-2I5.3(a)(l); 143B-282(2). 

.0105 ADOPTION BY REFERENCE 
(REPEALED) 

Statutory Authority G.S. 143-214.1. 

.0106 CORRECTIVE ACTION 

Any person conducting, permitting or control- 
ling an activity which causes an increase in the 
concentration of a substance above the water 
quality standard: 

(1) as the result of activities not specifically 
permitted by the state, shall assess the cause, 
significance and extent of the violation of 
water quality standards; submit a plan for 
eliminating the source of contamination and 
for restoration; and implement the plan in 
accordance with a special order; 

(2) at or beyond the review boundary, shall: 

(a) demonstrate, through predictive calcu- 
lations or modeling, that natural site con- 
ditions, facility designs and operation 
controls will prevent a violation of stand- 
ards at the compliance boundary; or 

(b) submit a plan for alteration of existing site 
conditions, facility design or operation 
controls that will prevent a violation at 
the compliance boundary, and implement 
that plan upon its approval by the direc- 
tor. 

(3) at or beyond the compliance boundary, 
shall, assess the cause, significance and ex- 
tent of the violation of water quality stand- 
ards and submit results of investigation and 
a plan for restoration and implement the 
plan in accordance with a special order. 

Statutory Authority G.S. 143-215.2; 

!43-215.3(a)(l); 143D-2S2. 

.0107 ALTERNATE CONTAMINANT 
CONCENTRATION 

(a) If the responsible party determines that it 
is not feasible to restore contaminated ground- 
waters to the level of the standards, then the re- 
sponsible party may apply to the director for a 
Special Order by Consent and submit a proposal 
for alternate contaminant concentrations. The 
proposal shall address the potential for adverse 
effects on human health and the environment 
through consideration of: 

(1) the physical and chemical characteristics 
of the contaminants, including the poten- 
tial for migration; 

(2) the hydrogeological characteristics of the 
impacted area and surrounding land; 



246 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



(3) the rate and direction of groundwater 
flow; 

(4) the proximity and withdrawal rates of lo- 
cal groundwater users; 

(5) the current and predictable uses of 
groundwater in the area; 

(6) the existing quality of groundwater, in- 
cluding other sources of contamination 
and their cumulative impact on the 
groundwater quality; 

(7) the proximity of the contaminant plume 
to hydraulically connected surface water; 

(8) the current and predictable uses of surface 
water hydraulically connected to the con- 
tamination plume, including existing 
quality of those waters, and any water 
quality standards established for those 
surface waters; 

(9) the potential for health risks caused by 
human exposure to the contaminants; 

(10) the potential damage to wildlife, crops, 
vegetation and physical structures caused 
by exposure to the contaminants; and 

(11) the persistence and permanence of the 
potential adverse effects. 

(b) In determining the feasibility of groundwa- 
ter qualiiy restoration activities and evaluating 
the proposal for alternate contaminant concen- 
trations, the director shall consider the extent of 
any threat to human health or safety, the extent 
of existing and potential damage to the environ- 
ment, the total cost of the restoration involved, 
the marginal or incremental cost of the restora- 
tion required, the economic benefit accruing to 
the responsible party as a result of the violation, 
technological constraints which might, prevent 
restoration and the public and economic benefit 
of requiring such restoration. Upon the direc- 
tor's approval of the proposal, alternate contam- 
inant concentrations will be authorized by a 
special order. 

(c) In making the determination required in 
Paragraph (b) of this Rule, the director shall re- 
quest public comments, in accordance with the 
provision of G.S. 143-215.4(b), prior to approv- 
ing or authorizing alternate contaminant con- 
centrations; provided that, the director, at any 
time and in his discretion, may authorize the re- 
sponsible party to make preliminary studies or 
investigations which will result in a proposal for 
alternate contaminant concentrations, without 
receipt of public comments. 



(a) For disposal systems permitted prior to 
December 30, 1983, the compliance boundary is 
established at a horizontal distance of 500 feet 
from the waste boundary or at the property 
boundary, whichever is closer to the source. 

(b) For disposal systems permitted on or after 
December 30, 1983, a compliance boundary shall 
be established 250 feet from the waste boundary, 
or 50 feet within the property boundary, which- 
ever point is closer to the source. 

(c) The boundary shall form a vertical plane 
extending from the water table to the maximum 
depth of saturation. 

(d) For ground absorption sewage treatment 
and disposal systems which are permitted under 
10 NCAC 10A .1900, the compliance boundary 
shall be established at the property boundary. 

(e) A contravention of the applicable water 
quality standard within the compliance boundary 
shall not be subject to the penalty provisions 
applicable under G.S. 143-215.6(a)(l)a. 

(f) The director shall require: 

(1) that permits for all activities governed by 
G.S. 143-215.1 will be written to protect 
the level of groundwater quality, estab- 
lished by applicable standards, at the 
compliance boundary; 

(2) that recommendations be made to protect 
the level of standards at the compliance 
boundary on all permit applications re- 
ceived for review from other state agen- 
cies; 

(3) that necessary groundwater quality moni- 
toring shall be conducted within the 
compliance boundary; and 

(4) that a contravention of standards within 
the compliance boundary be remedied 
through clean-up, recovery, containment, 
or other response when any of the fol- 
lowing conditions occur: 

(A) a violation of any standard in adjoining 
classified waters occurs or can be reason- 
ably predicted to occur considering hy- 
drogeologic conditions, modeling, or 
other available evidence; 

(B) an imminent hazard or threat to the 
public health or safety exists or can be 
predicted; or 

(C) a violation of any standard in ground- 
water occurring in the bedrock other than 
limestones found in the coastal plain sed- 
iments. 



Statutory Authority G.S. 143-214.1; 

143-21 '5 3(a)(1); I43B-282(2). 



Statutory Authority G.S. 143-215.1 (b); 
143-215. 3(a)(1); 143B-282. 



.0108 COMPLIANCE BOINOARY 



.0109 REVIEW BOINDARY 



NORTH CAROLINA REGISTER 



247 



PROPOSED RULES 



A review boundary is established around dis- 
posal systems at the mid-point between the 
compliance boundary and the waste boundary. 
Where the groundwater quality standards are 
reached or exceeded at the review boundary as 
determined by monitoring, the permittee shall 
take action in accordance with the provisions of 
Rule .0106(a)(2) of this Subchapter. 

Statutory Authority G.S. 143-215. 1 (b); 
143-215.3(a)(I); 143B-282. 

.0110 DELEGATION 

(a) The director is delegated the authority to 
enter into consent special orders under G.S. 
143-215.2 for violations of the water quality 
standards. 

(b) The director is delegated the authority to 
issue a proposed special order without the con- 
sent of the person affected and to notify the af- 
fected person of the procedure set out in G.S. 
150B-23 to contest the proposed special order. 



Statutory A uthority 
l43-215.3(a)(l). 



G.S. 



143-215.2; 



.0111 MONITORING 

(a) Any person subject to the provisions of 
G.S. 143-215.1 who causes, permits or has con- 
trol over any discharge of waste, shall install a 
monitoring system, at such locations, and in such 
detail, as the director may require to evaluate the 
efficiency of the treatment facility and the effects 
of the discharge upon the waters of the state. 

(b) Monitoring systems shall be operated in a 
manner that will not result in the contamination 
of adjacent groundwaters of a higher quality. 

(c) Monitoring shall be conducted and results 
reported in a manner and at a frequency specified 
by the director. 

Statutory Authority G.S. 143-215. Kb); 
I43-215.3(a)(l); 143-215.65; 143-215.66; 143- 
2I5.6S; 143B-2S2. 

.0112 REPORTS 

Any person subject to the provisions of G.S. 
143-215.1 and to the requirements for corrective 
action specified in Rule .0106 of this Subchapter 
shall submit to the director, in such detail as the 
director may require, a written report that de- 
scribes: 
( 1 ) the results of the investigation specified in 
Paragraphs (1) and (3) of Rule .0106. in- 
cluding but not limited to: 
(a) a description of the sampling procedures 
followed and methods of chemical ana- 
lvses used: and 



(b) all technical data utilized in support of any 
conclusions drawn or determinations 
made. 

(2) the results of the predictive calculations or 
modeling, including a copy of the calcu- 
lations or model runs and all supporting 
technical data, used in the demonstration 
required in Paragraph (2) of Rule .0106: and 

(3) the proposed methodology and timetable 
associated with the restoration of ground- 
water quality for those situations identified 
in Paragraphs (1) and (3) of Rule .0106. 

Statutory Authority G.S. 143-215.1 (b); 
I43-215.3(a)(l); 143-215.65: 143-215.68; 
143B-282. 

.0113 ANALYTICAL PROCEDLRES 

Tests or analytical procedures to determine 
compliance or noncompliance with the water 
quality standards established in Rule .0202 of this 
Subchapter will be in accordance with: 

( 1 ) The following methods or procedures for 
substances where the selected method or 
procedure provides a method detection limit 
value at or less than the standard: 

(a) Standard methods for the Examination of 
Water and Wastewater, 16th Edition, 

1985, published jointly by American 
Public Health Association, American 
Water Works Association and Water Pol- 
lution Control Federation; 

(b) Methods for Chemical .Analysis of Water 
and Waste, 1979, U.S. Environmental 
Protection Agencv publication number 
EPA-600, 4-79-020, as revised March 
1983: 

(c) Test Methods for Evaluating Solid Wastes: 

Physical Chemical Methods, 3rd Edition, 

1986, U.S. Environmental Protection 
Agency publication number SW-846; 

(d) Test Procedures for the Analysis of Pol- 
lutants Under the Clean Water Act, Fed- 
eral Register Vol. 49, No. 209, 40 CFR 
Part 136, October 26, 1984; 

(e) Methods or procedures approved by letter 
from the director upon application by the 
regulated source. 

(2) A method or procedure approved by the 
director for substances where the standard is 
less than the limit of detectibility. 



Statutory 
143B-2S2. 



Authority G.S. 143-21 5.3(a) ( 1 ); 



.0114 VARIANCE 

(a) The commission, on its own initiative or 
pursuant to a request under G.S. 143-215. 3(e), 



248 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



may grant variances to water quality standards 
and the compliance boundary. Persons subject 
to the provisions of G.S. 130A-294 may apply for 
a variance under this Section. 

(b) Requests for variances are filed by letter 
from the applicant to the Environmental Man- 
agement Commission. The application should 
be mailed to the chairman of the commission in 
care of the Director, Division of Environmental 
Management, Post Office Box 27687, Raleigh, 
N.C. 27611. 

(c) The application should contain the follow- 
ing information: 

(1) Applications filed by counties or munici- 
palities must include a resolution of the 
County Board of Commissioners or the 
governing board of the municipality re- 
questing the variance from water quality 
standards which apply to the area for 
which the variance is requested. 

(2) A description of the past, existing or pro- 
posed activities or operations that have 
or would result in a discharge of contam- 
inants to the groundwaters. 

(3) Description of proposed area for which a 
variance is requested. A detailed location 
map, showing orientation of the facility, 
potential for groundwater contaminant 
migration, as well as the area covered by 
the variance request, with reference to at 
least two geographic references (numbered 
roads, named streams/ rivers, etc.) must be 
included. 

(4) Supporting information to establish that 
the variance will not endanger the public 
health and safety, including health and 
environmental effects with exposure to the 
groundwater contaminants. (Location of 
wells and other water supply sources in- 
cluding details of well construction within 
1/2 mile of site must be shown on a map). 

(5) Supporting information to establish that 
standards cannot be achieved by providing 
the best available technology econom- 
ically reasonable. This information must 
identify specific technology considered, 
changes in quality of the contaminant 
plume as demonstrated through predictive 
calculations approved by the director, and 
technological constraints which limit res- 
toration to the level of the proposed al- 
ternate contaminant concentrations. 

(6) Supporting information to establish that 
compliance would produce serious hard- 
ship on the applicant. 

(7) Supporting information that compliance 
would produce serious hardship without 
equal or greater public benefit. 



(8) A copy of any Special Order that was is- 
sued in connection with the contaminants 
in the proposed area and supporting in- 
formation that applicant has complied 
with the Special Order and any alternate 
contaminant concentrations contained 
therein. 

(d) Upon receipt of the application, the director 
will review it for completeness and request addi- 
tional information if necessary. When the appli- 
cation is complete, the director shall give public 
notice of the application and schedule the matter 
for a public hearing in accordance with G.S. 
143-2 15.4(d) and the procedures set out below. 

(e) Notice of Public Hearing. 

(1) Notice of public hearing on any variance 
application shall be circulated in the ge- 
ographical areas of the proposed variance 
by the director at least 30 days prior to the 
date of the hearing: 

(A) by publishing the notice one time in a 
newspaper having general circulation in 
said county; 

(B) by mailing to the North Carolina De- 
partment of Human Resources, Division 
of Health Services, and appropriate local 
health agency; 

(C) by mailing to any other federal, state 
or local agency upon request; 

(D) by mailing to the local governmental 
unit or units having jurisdiction over the 
geographic area covered by the variance; 

(E) by mailing to any property owner 
within the proposed area of the variance, 
as well as any property owners adjacent 
to the site covered by the variance; and 

(F) by mailing to any person or group upon 
request. 

(2) The contents of public notice of any 
hearing shall include at least the following: 

(A) name, address, and phone number of 
agency holding the public hearing; 

(B) name and address of each applicant 
whose application will be considered at 
the meeting; 

(C) brief summary of the proposed standard 
variance or modification of the perimeter 
of compliance being requested; 

(D) geographic description for a proposed 
area for which a variance is requested; 

(E) brief description of the activities or op- 
erations which have or will result in the 
discharge of contaminants to the ground- 
waters described in the variance applica- 
tion; 

(F) a brief reference to the public notice is- 
sued for each variance application; 



NORTH CAROLINA REGISTER 



249 



PROPOSED RULES 



(G) information regarding the time and lo- 
cation for the hearing; 

(H) the purpose of the hearing; 

(I) address and phone number of premises 
at which interested persons may obtain 
further information, request a copy of 
each application, and inspect and copy 
forms and related documents; and 

(J) a brief description of the nature of the 
hearing including the rules and procedures 
to be followed. The notice shall also state 
that additional information is on file with 
the director and may be inspected at any 
time during normal working hours. Co- 
pies of the information on file will be 
made available upon request and payment 
of cost or reproduction. 

(f) All comments received within 30 days fol- 
lowing the date of the public hearing shall be 
made part of the application file and shall be 
considered by the commission prior to taking fi- 
nal action on the application. 

(g) In determining whether to grant a variance, 
the commission shall consider whether the ap- 
plicant has complied with any alternate contam- 
inant concentrations established pursuant to 
Rule .0107 of this Section and has complied with 
any Special Order issued under G.S. 143-215.2. 

(h) If the commission's final decision is unac- 
ceptable, the applicant may file a petition for a 
contested case in accordance with Chapter 150B 
of the General Statutes. If the petition is not 
filed within 30 days, the decision on the variance 
shall be final and binding. 

(i) A variance shall not operate on a defense to 
an action at law based upon a public or private 
nuisance theory or any other cause of action. 

Statutory Authority G.S. l43-215.3(a)( 1 ); 143- 

2/5.3 (a) (3); 143-215.3 (a) (4); 143-215.3 (e); 
143-215.4. 

SECTION .0200 - CLASSIFICATIONS AND 
WATER QUALITY STANDARDS 

.0201 CLASSIFICATIONS 

The classifications which may be assigned to the 
underground water; , groundwaters will be those 
specified in the following series of classifications: 

(1) Class GA waters; usage and occurrence: 

(a) Best Usage. ȣ Waters. Existing or po- 
tential source of drinking water supply for 

[lllIllt.lllN. 1 I T ITT n TTTt: . (_■' 1 1 fl 1 it ! V rT~rt^T 11 1 iu tT+TTtr 

procuring without treatment, except 
where Reeessafy to correct naturally ee- 
curring condition; . . 

(b) Conditions Related to Best Usage. This 
class is intended for those groundwaters in 



which chloride concentrations are equal 
to or less than 250 mg/'l, and which are 
considered suitable safe for drinking, hut 
which may require treatment to improve 
quality related to natural conditions. e«- 
linary eser &h4 food processing without 
troatmont, b«t which may require) disin 
faction »f other treatment when necessary 
to reduoo naturally occurring concon 
trations » ordor Ret to exceed the maxi 
mum concentrations specified i» Rule 
^ua (-4 4++-, Section. 
(c) Occurrence. A4 depths greater tha» 30 feet 
below k«+4 surfaco a«4 i» In the saturated 
zone, above a depth ef 30 feet- whoro 
these wat e rs are a principal source ef pe- 
table water supply. 
(2) Class GSA waters; usage and occurrence: 

(a) Best Usage. Existing or potential source 
of water supply for potable mineral water 
culinary ase? food processing, and con- 
version to fresh waters, by treatment. 

(b) Conditions Related to Best Usage. This 
class is intended for those groundwaters in 
which naturally occurring the chloride 
concentrations due to natural conditions 
is in excess of afe greater than 250 mg 1, 
»«4 but which afe otherwise may be con- 
sidered safe suitable for use as potable 
mineral water after treatment K> reduce 
concentrations of naturally occurring sub- 
stances, culinary ttse? m*& food processing 
without treatment b«t may- requiro disin 
faction e* other treatm e nt wh e n necessary 
to reduce naturally occurring concon 
trations i» order »et to exceed the maxi 
hwh» concentrations specified m Rule - 
4)303 sf this Section. 

(c) Occurrence. At depths greater than 30 feet 
below la«4 surface a»4 i» In the saturated 
zone. abov e a d e pth ei 30 feet wher e 
these waters afe a principal source e£ pe- 
table mineral water supply. 

(4) Class G-B waters; usage aft4 occurrence: 
(a} Best Usage. Source ef recharge to surfac e 
waters a«4 groundwat e rs occurring below 
a depth ef 30 feety source ȣ tr e atabl e wa- 
tef supply. 
(fe4 Conditions Related to B e st I "sag e . Pfe- 
cipitation is the principal sourc e ©f fe- 
chargo to the saturated iiono. T4*e water 
h* the saturated j'.one abov e a depth e£ 
30 feet is ef drinking water quality m 
much ©f the stat e . However, the upper 
30 feet el the earth's surface fs generally 
vefy vulnerable to pollution from man's 
activiti e s, aft4 should be considered a ey- 
cling iione fef removing most ef aW tO the 



250 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



contaminants from the water by- adsorp 

* i .-xn 'iht/i r~r\ tinn till g--i linn ^^C 111! VAT " ' ' * ' ' *' ' ' ' 
I 1 \f 1 1 j Ul'.'l'l pnUI »i 1IIL1UL IU 1 I l_M TtTTTUT 1 1UIUI III 

treatment processes. Jo recognition of 
this feet? this classification is intondod £©f 
those freoh groundwatoro occurring at 

ft nr^t l-i i- lj^^ tU^in /I I m^l l^^^r^^^^ Lil^^i ' ' J 1 t ri *'■*'* 

CCTTT 1 1 J IV JJ 1 1 1 LI IT B O IQOl Ul_ Rr " IU1 1\I UUI1 UtV 

that afe ef suitabl e quality foF recharge to 
the deeper aquifers aoe surfaco waters of 

* 1^ i » ■*"<" 
liiu cn uiv. 

(o)- Occurrenc e . Abov e a depth ef 30 feet 
below faoo surface. 
f4} Class GSB waters; usage and occurrence: 

(a) Best Usage. Sourco ef recharge to saline 
surface waters i»4 salin e groundwaters 
occurring below a depth of 30 feet? source 
of treatable water supply. 

(b) Conditions Related to Best Usag e . Rfe- 
cipitation is the principal source of Fe- 
charge to the saturated aono. The water 
io tbe saturated aono above a d e pth of 30 
feet- of the earths surface is generally very 
vulnerable to pollution from man's activ 
ities and- should he consider e d a cycling 
zon e fof removing most of ah of tbe con 
taminants from the water by adsorption, 
absorption, filtration of other natural 
treatment processes. f» recognition of 
this feetr this classification is int e nded fof 
those salin e groundwaters occurring at- 

, l..i\l l-i -- I . >.- . - t 1a - i II ll I I . t. .t W^Jj-^iij I ■ i ti , 1 ■- 1 l r\ ■ ■ , ■, | 

Cn 1 ' l 1 1 .' rCrTTTT 11 IUI 1 ET7 IXrCT l.'V IT. J FT I III IT.I [ 1 VI I IUIV 

that afe of suitable quality fof recharge to 
the deeper aquifers ao4 surfac e waters of 
the state. 
(o) Occurrence. Above a depth of 30 feet 
below k+o4 surface. 
(3) (4} Class GC waters: usage and occurrence: 

(a) Best Usage, of Waters. Source of water 
supply for purposes other than human 
drinking, culinary eser of food process 

iftgr 

(b) Conditions Related to Best Usage. This 
class includes those waters groundwaters 
that do not meet the quality criteria Fe- 
quirements of waters having a higher 
classification and for which measures ef- (2) 
forts to upgrade restore in-situ to a higher 
classification would not be technically 
technologically of economically not- be 
feasible, or not in the best interest of the 
public, ©f and for which maximum feasi- 
ble restoration has been completed. 
treatment at the point of use to a quality 
suitable for drinking is not technologically 
feasible. 

(c) Occurrence. In the saturated zone, 



as de- 
termined by the commission on a case by 
case basis. 



Statutory Authority G.S. 143-214. 1; 

143B-282(2). 

.0202 WATER QUALITY STANDARDS 

(a) The water quality standards for the under 
ground waters groundwaters of the state are those 
specified in this Rule. They are the maximum 
allowable concentrations resulting from any dis- 
charge of contaminants to the land or waters of 
the state, which may be tolerated without creat- 
ing a threat to human health or which would 
otherwise render the groundwater unsuitable for 
its intended best usage. Where groundwater 
have been exceeded due to 
restoration efforts shall be de- 



quality standards 
man's activities 



signed to restore groundwater quality to the level 
of the standard or as closely there to as is practi- 
cable. In recognition of circumstances or condi- 
tions which may prevent restoration to the level 
of the standards, the director may authorize al- 
ternate contaminant concentrations in accord- 
ance with Rule .0107 of this Subchapter. Thooo 
standards are tbe maximum levels of contam 
ination that- are permitted under these R e gu 
lations. Jt is the policy of the EMC, however, 

l\.r pTTTTCTT HI HJ 1 1 11X11 1 IU1I I 1 1 IV L. n.1 .'I II 1 E <J Lll L II I F VJ 1 1 1 l\J 

groundwaters where that quality is better than 
the assigned standards. Therefore, the increas e 
to am constituent foF which a standard is spoci 
tied- to a concentration of §0 percent of the Stan 
dard may result i» review of modification ef as 
existing permit, requirements foF additional 
monitoring, of issuanco of a special order whore 
a violation of standards FHoy be predicted. 

(b) The standards will not be considered vio- 
lated when concentrations of substances which 
exceed the established limits are attributable to 
natural conditions. 

Maximum concentrations for substances are 



(£1 ^ 
established as the lesser of: 



ill 



Health advisory based on the no-ob- 
served-adverse-effect-level (NO AFT) or 
lowest-observed-adverse-effect-level 
(1 OA1 I >; 

Concentration which corresponds to an 
incremental lifetime cancer risk of 1x10" 



[31 
(41 
(Jl 

•111 



Taste threshold limit value; 



Odor threshold limit value; 



National primary' drinking water standard; 



or 



National secondary drinking water stand- 
ard. 

(d) The maximum concentrations for contam- 
inants specified in Paragraphs (h) and [i] of this 
Rule, shall be as listed. 

(e) Maximum concentrations for substances 
not specified in Paragraphs (h) and (I) of this 
Rule, shall be determined by the director in ac> 



NORTH CAROLINA REGISTER 



251 



PROPOSED RULES 



corJancc with the procedures established in Par- 
agraph (c) of this Rule. Where available data 
docs not enable development of maximum con- 
centrations in accordance with established pro- 



cedure^ the director shall consider appropriate 
I .'.S. Hnvironmental Protection Agency data and 
other published health effects data in developing 
maximum concentrations. 

(f) Where the maximum concentratio n of a 
substance is less than the limit of detectabilitv, 



the substance shall not be permitted in detectable 
concentrations. 

(g) Where two or more substances exist in 
combination, the director shall consider the ef- 
fects of chemical interactions and may establish 
maximum concentrations at values less than 
those established in accordance with Paragraphs 
(d) and ( e ) of this Rule. In the absence of in- 
formation to the contrary, the carcinogenic risks 
associated with carcinogens present shall be con- 
sidered additive and the toxic effects associated 
with non-carcinogens present shall also be con- 
sidered additive. 

(h) fb+ Class GA Standards. Waters. ¥he 
maximum allowable contaminant levels fe* toxic 
ft«4 deleterious substances are thos e concon 
t rations specified i» Subparagraphs f44 - f3-4-^ ef 
this Paragraph. t4*f substances not- sp e cified. t4*e 
standard is U+e naturally occurrin g concentration 
*s determined by tfee director. Synthetic, man 
mad e , ef other substances 0**t 4» »et naturally 
occur afe prohibit e d. Where not otherwise indi- 
cated, the standard refers to the total concen- 
tration in milligrams per liter of any constituent. 
(44 wh e re naturally occurring concentrations 
exceed tl*e established standard, (4+e Stan 
dard vv-itt be (4h* naturally occurring con 
centration as determined by- the dir e ctor; 

( 1) acrvlamide (propenamide): 0.00001 

(2) alachlor: 0.1)1)015 

QX aldicarb ( TIMIK): 0.009 
(4_2(44-0. arsenic: 0.05 mg-h 
(5)f4-H barium: 1.0 mgd; 

(6) ben/ene: 0.0007 

(7) bromoform (tnbromomethane): 0.00019 
(81(43) cadmium: 440 mg4 0.005 

(9) carbofuran: 0.036 
(10) carbon tetrachloride: 0.0003 



1) chlordane: 2.7 x 10 -5 



M2]<-^> chloride: 250.0 mg4 

( 13) chloroben/.ene: 0.3 

( 14) chloroform (tnchloromethanc): 0.00019 

(15) 2-chlorophenol: 0.0001 

( 16) (4J4 chromium: 0.05 mg4 

(17) cis-1.2-dichloroethene: 0.07 

1 l\) fJ4 total coliform organisms (total): 1 per 

100 milliliters 
(19)(3&) color: less tha» 15 color units 



(20) copper: 1.0 

(21) cyanide: 0.154 

(22) (3) 2, 4-D ( 2.4-dichlorophenoxv acetic 
acid): 0.07 04 mg4f 

(23) 1 ,2-dibromo-3-chloropropane: 2.5 x IP" 5 

(24) dichlorodiiluoromethane (Freon-12: 



Halon): 0.00019 

(25) 1 ,2-dichloroethane (ethylene dichloride): 
0.00038 

(26) 1,1-dichloroethvlene (vinvlidene chlo- 
ridc): 0.007 

(27) 1.2-dichloropropane: 0.00056 

(28) p-dioxane ( 1.4-diethvlene dioxide): 0.007 

(29) dioxin: 2.2 x 10 '" 

(30) total dissolved solids (total): 500 mg-k apt4 
(31)(3) endrin: 0.0002 mg4 

(^2) epichlorohydrin 

(l-chloio-2.3-cpo.x\propane): 0.00354 

(33) ethvlbenzene: 0.029 

(34) ethylene dibromide (FDB; 
1.2-dibromoethane): 0.05 x 10 5 

(35) ethylene glycol: 7.0 



(36)(3Q) flouride: 10 4-4 m§4t 
(37) foaming agents: 0.5 

(3S) (33) gross alpha particle activity (including 
radium- 226 but excl uding radon and ura- 



nium 
gros i 



15pCi 1 
bete particle activity: ^0 pCi 1; 



(23) 

(39) heptachlor: 7.6 x 1Q' ! 

(40) heptachlor epoxide: 3.8 x 10 5 

(41 ) hexachlorobenzcne (perchlorobenzene): 



0.00002 
(42) n-hexane: 14.3 
(431(34) iron: 0_3 040 m*± 
(44)(44) lead: 0.05 mg4f 
(45)f4) lmdane: 2.65 x 10 5 

4404h*j4t 
(46) f2-H manganese: 0.05 mgl; 
(47)(44) mercury: 0.0011 mgfc 
(48) metadichlorobenzene 

( 1 ,3-dichlorohenzene): 0.62 
(49) (4| methoxychlor: 0.1 mg4t 

(50) methylene chloride (dichloromethane): 
0.005 

(51) methvl ethyl ketone (MFK; 2-butanone): 
0.17 

[52} nickel: 0.15 



( 53^44) mtrate: (as N) 10.0 mg4t 
(54)f44f nitrite: (as N) 1.0 m&k 

(55) orthodichlorobenzene 

( 1.2-dichlorobenzene): 0.62 

( 56) oxamvl: 0.175 

(57) paradichlorobenzene 
(1.4-dichlorobenzene): 0.0018 

(5S) pentachlorophenol: 0.22 

(59) (36) pi 1: 6^5 - 8J5 ft© increase from na- 
turally occurring p44 valuer , m acidity be- 
knv 6* increase t» alkalinity above ?» 



252 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



(39) phenol: ftot greater than 444 ugl; 
(60) f34) combined radium-226 and radium- 

228 (combined): 5 pCi/1 
(61)(44) selenium: 0.01 mg+H 
[62}(40) silver: 0.05 mg4t 

(63) stvrene (ethenylbenzene): 1.4 x 10" s 

(64) sulfate: 250.0 

(44) thermal: ftet greater tba» 40 degrooo 
Fahr e nh e it varianc e from the naturally 
occurring level as determined by the 44 
rector: 

(65) tctrachloroethylene (perchloroethvlene; 
PCH): 0.0007 

(66) toluene (methvlbenzene): 1.0 
(67)(4) toxaphene: 3.1 x W~Jm$ff*gfc 
(68)(4) 2, 4, 5,-TP (Silvex): .01 H*y4 

(ft) total tnhalomothanos: 040 mgd; 

(69) trans- 1 ,2-dichloroethenc: 0.07 

(70) 1.1.1-tnchloroethane (methyl 
chloroform): 0.2 

(71) tnchloroethvlene (TCP): 0.0028 

(72) vinvl chlonde (chloroethvlene): 1.5 x 10" 5 

(73) xylenes (o-, m-. and p-): 0.4 

(74) zinc: 5.0 

[i| fe) Class GSA Water! . . Standards. The 
standards for this class shall be the same as those 
for Class GA except as follows: 

( 1 ) chlonde: allowable increase not to exceed 
100 percent of the natural quality con- 
centration; and 

(2) total dissolved solids: 1000 mg 1. 

44te maximum allowable contaminant levels fof 
toxic a«4 deleterious substances are thos e con 
centrations specified Subparagraphs (44 - (44) ef 
t!4s Paragraph. Peg substances net specified, the 
standard is the naturally occurring concentration 
as determined by the director. Synthetic, man 
made, Bf other substances that 44 fw*t naturally 
occur ate prohibited. Where Het otherwise indi 
catod. the standard refers to the total concen 
tration h+ any- constituent. 

f4) where naturally occurring concentrations 
exceed the established standard, the stan 
dard w41 be the naturally occurring con 
contortion as d e t e rmin e d by the director; 

(3) total colifonn: 4- per 400 milliliters; 

(4) e ndrin: 4>003 mg4t 



lindane: 44444 mg 1; 
methoxychlor: U4 mg 1; 
toxaphene: 4405 mj 1; 

3r4r^CW-mg4r 

2,1,5. IP S4*e* 444 mg4r 



(*) 

(*) 

(0) tetet trihalomethanes: 0444 me4f 

(40) arsenic: 445 mg-k 

(444 barium: 444 Fftg-k 

(4-3) cadmium: 4340 mg-k 

(44) chromium: 445 mg 1; 

(44) lea4f 4£ mg4t 



(44) mercury: 4403 mg'l; 

(44) nitrate: (as 44 4044 mg4f 

(44) nitrite: (as 44 444 mg4t 

(4&) selenium: 444 mg/'l; 

(44) stive* 445 mg/H 

(00) fluoride: 4t5 mg4t 

(34) combined radium - 336 at»4 radium - 3344 
5pGi4> 

(33) gross alpha particle activity: 44 pCi/1; 

(34) gross beta particle activity: 50 pCi/1; 
t~>A\ : r ^„- nin m ,. i. 

(-35) manganese: 445 mg/1; 

( 26 1 n \ \ ' ^'n In r ren m from n.' it i itvi I I v ftoca lrrin r* 

p44 values » acidity below ©f increas e i» 
alkalinity above 7» 
(44) chloride: allowable increase net to exceed 
400 percent e4 0*e naturally occurring 
chloride concentration; 

\ ilO * CTJ ITT I rtT^TT l'T till 1 I .T TITtTT?^ 

(30) phenol: tw»t greater than 444 ug/1; 
(40) total dissolved solids: 4000 mg4> aa4 
(44) thermal: net greater than 40 degrees 
Fahrenheit varianc e from the naturally 
occurring l e vel as determined by the 44 
roctor. 
(4) Class G44 Waters. 44 increase above the 
naturally occurring concentration ef emy toxic ef 
deleterious substance unless it ea» be shown, 
upon request, to the satisfaction ef the director 
that the increas e : 

(4-) w41 f*e+ cause »* contribut e to the con 
travention e4 water quality standards » 
adjoining waters ef a different class; 

/ J \ 1 l • | 1 1 nut 'ii-«i'i t m l ilit.i | »-t -i *t-i ■-» «-t ft jr liii-K t h-it 

\ E J " ILI rTTTT ULL (ill RoRvO TTT Cr 1 I IU.1 1 1 n.1 LTTJ\_ 1 1 I j 1U. I 

unusual ef different hydrologjcal oondi 
tions may cause a throat to public health 
ef the environment; an4 
(4) w444 net cause a» existing ef potential 
water supply to become unsafe ef unsuit 
able i4f its current eser 
(e) Class GSB Waters. 44> increase above the 
naturally occurring concentration ef any toxic ef 
deleterious substanco unlooo it ea» be shown, 
upon r e quest, to t44» satisfaction ef the director 
that the increase: 

(4) w441 net cause ef contribute to the eoft- 
travention ef water quality standards » 
adjoining waters ef a different class; 

1 LT ^tTH RCR ttVT.^1 111 UTCTT^ ITT CT 1 1 !U III tOl TTITTT tTTCTT 

unusual ©f different hydrological condi 
tions H%ay cause a tlireat to public health 
e* the environment; aft4 
(4) w4J4 ftet cause a» existing ef pot e ntial 
water supply to becamo unsafe »f unsuit 
able fof its current «ser 
(d) (4) Class GC Waters. All chemical, radio 
activ e , biological, tast e producing, odor produc 
»g7 thermal, a«4 other toxic &f deleterious 



NORTH CAROLINA REGISTER 



253 



PROPOSED RULES 



substances '. hall m*t exceed the concentration 
uxi ji tintj at the time ef classification. 

(1) The concentrations of suhstances which, 
at the time of classification exceed water 
quality standards, shall not be permitted 
to increase. For all other substances, 
concentrations shall not be caused or per- 
mitted to exceed the established standard. 

(2) The concentrations of substances which, 
at the time of classification, exceed water 
quality standards shall not cause or con- 
tribute to the contravention of groundwa- 
ter or surface water quality standards in 
adjoining waters of a different class. 

(3) Concentrations of specific substances, 
which exceed the established standard at 
the time of classification, shall be listed in 
Section .0300 oi_ thus Subchapter. 



than 2S& mg 1 chloride concentration a«4 
occurring between land surface a&4 a depth 
ef 20 feet- are classified Gftr 

(2)f4} Class GSA Waters. Those underground 
waters groundwaters in the state naturally 
containing greater than 250 mg 1 chloride 
concontration a«4 occurring at- depths 
greater than 20 feet- below land surfaco are 
classified GSA. 

(4} Class GSB Waters. Those underground 
waters i» the state naturally containing 
greater than 340 mgd chloride concentration 
a«4 occurnng between fen4 surface *h4 a 
depth ef 30 feet- aj=e classified GSB. 

(3)f4fr Class GC Waters. Those underground 
waters groundwaters assigned the classifica- 
tion GC in Rules .1)303 - .0318 of this Sec- 
tion. 



Statutory Authority 

143B-282(2). 



G.S. 



143-214. 1; Statutory Authority G.S. 143-214.1; 143-282(2). 



SECTION .0300 - ASSIGNMENT OF 
UNDERGROUND WATER CLASSIFICATIONS 

.0301 CLASSIFICATIONS: GENERAL 

(a) Schedule of Classifications. The classifica- 
tions are based on the quality, occurrence and 
existing or contemplated best usage of the ««- 
derground waters groundwaters as established in 
Section .0200 of this Subchapter and are assigned 
statewide except where supplemented or sup- 
planted by specific classification assignments by 
major river basins. 

(b) Classifications and Water Quality Stand- 
ards. The classifications and standards assigned 
to the underground waters groundwaters are de- 
noted by the letters GA, GSA. G4^ G4vBr or GC. 
These classifications refer to the classifications 
and standards established by ±5 NGAC H-; 
"Classifications an4 Standards Applicabl e t» the 
Und e rground Waters ef North Carolina." Rule 
.0201 of this Subchapter. 

Statutory Authority G.S. 143-214.1; 143-282(2). 

.0302 STATEWIDE 

{etf The classifications assigned to the und e r 
ground waters groundwaters located within the 
boundaries or under the extraterritorial jurisdic- 
tion of the State of North Carolina are: 
(1) Class GA Waters. Those underground 
waters groundwaters in the state naturally 
containing fe*» than 250 mg 1 or less of 

C~ M ninil l' 'lil.l J"v . • ■ ■ 1 i t-r-t ri.l ■ i t , l.ii-.) U.- i i r- . i ■ i t . i r- th-iii 
111U1 1UL Ul l\l K.,' \-^J U I J 1 1 I E II I UVL'lIl . ' U V-TJ IT- 1 1 1 II I J I 

3U feet below land surface are classified GA. 

(-3+ Class GU Waters. Those underground 

waters » the stat e naturally containing fess 



.0319 RECLASSIFICATION 

The underground water groundwater classifica- 
tions as assigned may be revised by the EMC 
commission following public notice and subse- 
quent public hearing. Changes may be to a 
higher or lower classification. Reclassification 
requests may be submitted to the Director, ef 
the Division ef Environmental Management. 



Statutory Authority G.S. 

143-215.3(e); 143B-282(2). 



1 43-2 14. 1; 



****************** 



l\otice is hereby given in accordance with G.S. 
J SOB- 12 that the Dhision of Coastal Management 
intends to amend regulation cited as 15 NCA C 7H 
.0104. 



Th 



he proposed effective dale of this action is No- 
vember 1, 1988. 



1 he public hearing will be conducted at 10:00 
a.m. on July 28, 1988 at Duke Marine Lab Audi- 
torium. P'tvers Island, Beaufort, North Carolina. 

C omment Procedures: A 11 persons interested in 
this matter are invited to attend the public hearing. 
The Coastal Management Division will receive 
written comments up to the date of the hearing. 
Any person desiring to present lengthy comments 
is requested to submit a written statement for in- 
clusion in the record of proceedings at the public 
hearing. Additional information concerning the 
hearing or the proposal may be obtained by con- 



254 



.NORTH CAROLINA REGISTER 



PROPOSED RULES 



lading Portia Rochcll, Division of Coastal Man- 
agement, P. O. Box 27687, Raleigh, N. C. 27611. 
(919) 733-2293 

CHAPTER 7 - COASTAL MANAGEMENT 

SUBCHAPTER 711 - STATE GUIDELINES FOR 
AREAS OF ENVIRONMENTAL CONCERN 

SECTION .0100 - INTRODUCTION AND 
GENERAU COMMENTS 

.0104 DEVELOPMENT INITIATED PRIOR 
TO EFFECTIVE DATE OF REVISIONS 

(c) In the case of subdivisions which have re- 
ceived all required final or preliminary local ap- 
provals or a CAM A major development permit 
prior to May 27, 19KK, and have therein met all 
applicable CAM A setback requirements as of 
May 27, 19N8. the updated occanfront erosion 
rate approved bv the Commission on July 29, 
1988, and effective on November J^ 1988, shall 
only apply to the maximum extent feasible. 1 or 
these previously approved lots, the erosion rate 
existing as of May 27, 1988, shall be applied in 
determiniim minimum occanfront setbacks. 



Statutory Authority 113A-107, 
124. 



113 A- 113; 113A- 



TITLE 24 - INDEPENDENT AGENCIES 

Ivotice is hereby gh'en in accordance with G.S. 
150B-12 that the North Carolina Housing Finance 
Agency intends to adopt regulation cited as 24 
NCAC IB .0004. 

1 he proposed effective date of this action is Oc- 
tober I, 19SS. 

1 he public, hearing will be conducted at 9:00 
a.m. on July 18, 1988 at 3300 Drake Circle, Suite 
200, Raleigh, North Carolina, 27607. 



Cc 



omment Procedures: Written comments con- 
cerning this rule must be submitted by July 18, 
1988 to the A PA Coordinator, N. C. Housing Fi- 
nance Agency. 3300 Drake Circle, Suite 200, Ra- 
leigh, North Carolina, 27607. 

CHAPTER I - N.C. HOUSING FINANCE 
AGENCY 

SUBCHAPTER IB - RULEMAKING 

PROCEDURES 

.0004 DECLARATORY RULINGS 



Any person affected by a statute administered 
by the board or by a rule promulgated by the 
board may request a declaratory ruling as to the 
validity of a rule or as to the applicability to a 
given state of facts. All requests for declaratory' 
rulings shall be in writing and shall contain the 
following information: 

(1) Name(s) and address(cs) of petitioner(s); 

(2) Statute and/or rule to which the petition 
relates: and 

(3) Concise statement of facts and explanation 
of the manner in which the petitioner is in- 
jured, or thinks he may be injured, by the 
statute or rule as applied to him. 

Statutory Authority G.S. 122.4-5; 150B-17. 
****************** 

l\otice is hereby given in accordance with G.S. 
I SOB- 1 2 that the North Carolina Housing Finance 
AgencyjNorth Carolina Housing Partnership in- 
tends to adopt regulations cited as 24 NCAC 1M 
.0201 - .0205. 

1 he proposed effective date of this action is Oc- 
tober I, 1988. 

1 he public hearing will be conducted at 10:00 
a.m. on July 15, 1988 at North Carolina Housing 
Finance AgencyjNorth Carolina Housing Part- 
nership, 3300 Drake Circle. Suite 200, Raleigh, 
North Carolina, 27607. 



Co 



omment Procedures: Written comments con- 
cerning this rule must be submitted by July 15, 
1988 to the A PA Coordinator, North Carolina 
Housing Partnership, P. O. Box 26147. Raleigh, 
N. C. 2761 1 . Oral comments may be presented 
at the hearing. 

SUBCHAPTER IM -NORTH CAROLINA 
HOUSING TRUST FUND 

SECTION .0200 - ENERGY CONSERVATION 

AND DOUSING 
REHABILITATION INCENTIVE PROGRAM 



.0201 PURPOSE 

The purpose of the Energy Conservation and 
Housing Rehabilitation Incentive Program (the 
"Program") is to provide funding to encourage 
the upgrading and energy efficiency of housing 
for very low-, low- and moderate-income house- 
holds. Program funds will be used both to lev- 
erage other funds for comprehensive housing 



NORTH CAROLINA REGISTER 



255 



PROPOSED RULES 



rehabilitation improvements and independently 
for weatheri/.ation improvements. 

Statutory Authority G.S. 122A-5; 122A-5.1; 
122E-4; I22E-5; I22E-8. 

.0202 ELIGIBILITY 

(a) Eligible projects under the program will in- 
clude: 

(1) Comprehensive housing rehabilitation 
projects that utilize program funds for 
energy conservation improvements and 
other funding sources for the other reha- 
bilitation improvements; 

(2) Projects that exclusively involve energy 
conservation improvements to existing 
residential structures. Specific activities 
eligible for program funds will be identi- 
fied in the application material and fund- 
ing documents. 

(b) Eligible applicants for program funds in- 
clude units of state and local government, Public 
Housing Authorities, Community Action Agen- 
cies, nonprofit organizations, and for-profit de- 
velopers. Eligible recipients of program funds 
must directly operate the program funded. 

(c) I lousing units assisted under the program 
must be occupied by very low-, low- or moder- 
ate-income households, as defined in the act. 
Specific targeting of funds required under the 
program will be identified in the program appli- 
cation materials and funding documents. 

(d) All rental housing units assisted under the 
program must remain affordable to the occupant, 
as required by the act. Applicants for program 
funding will be required to demonstrate how af- 
fordability will be maintained. The agency, 
through its funding agreement, will include mea- 
sures to help ensure that affordability is main- 
tained. 

(c) Eligible forms of assistance under the pro- 
gram will include loans, grants, combination 
grant /loans and other comparable forms of as- 
sistance. Loans will be repaid to the Housing 
Trust Fund. The agency may establish standards 
for grants and loans in program documents. 

Statutory Authority G.S. I22A-5; 1 22 AS. I; 
122E-4; 122E-5; 122E-8. 

.0203 APPLICATION PROCEDURES 

(a) Funding cycles for program funds will be 
established on an annual basis, or more fre- 
quently, depending on the need and the avail- 
ability of funds. 

(b) The agency will solicit applications for 
program funds by advertising in newspapers and 
other media, mailing information to eligible ap- 



plicants [as defined in .0202(b)] and by other 
methods of public announcement. 

(c) Eligible applicants may apply for funding 
under the program by submitting an application 
to the agency in a manner described in the pro- 
gram application material available from the 
agency. The agency will develop the application 
material which will include, but not be limited to, 
a program description, application instructions 
and the application form(s) and supporting doc- 
uments. The agency may from time-to-time 
amend the contents of the application material. 

(d) The agency will provide technical assistance 
to prospective applicants to assist them in pre- 
paring applications for program funds. 

Statutory Authority G.S. 122A-5; I22A-5.I; 
122E-4; 122E-5; 122E-8. 

.0204 SELECTION PROCEDURES 

(a) In distributing program funds, the partner- 
ship will develop an allocation formula that will 
promote the distribution of funds across the state 
based on the following allocation factors: low- 
er-income housing need; an equitable distrib- 
ution of funds among the state's geographic 
regions; and a balance between the availability 
of funds in urban and rural areas. 

(b) The agency's evaluation of applications for 
funding will take into consideration the following 
criteria: 

(1) Consistency of the application with the 
purposes and requirements of the Act; 

(2) Consistency of the application with the 
purposes and requirements of the Stripper 
Well Litigation Settlement Agreement; 

(3) Benefit to very low- and low-income 
households; 

(4) Extent to which program funds are recy- 
cled; 

(5) Experience of the applicant and its ad- 
ministrative plan; and 

(6) Community support for the project. 

(c) In addition, priority will be given to projects 
that: 

(1) Address special housing needs; 

(2) Expand opportunities in areas where there 
is a shortage of standard and affordable 
housing; and 

(3) Upgrade housing currently failing to meet 
minimum standards of health and safety. 

The Partnership may establish additional evalu- 
ation criteria. All criteria utilized for evaluating 
applications Will be described in the application 
materials. 

(d) All applications received by the agency will 
be reviewed at the time they are received to de- 
termine if the application is complete. Appli- 



256 



NORTH CAROLINA REGISTER 



PROPOSED RULES 



cants submitting incomplete applications will be 
notified by the agency and be given the oppor- 
tunity to submit additional information. All ap- 
plication information must be submitted before 
the application deadline. The agency will evalu- 
ate applications based on the allocation catego- 
ries and the evaluation criteria described in Rule 
.0204(a) and (b). Additional information on the 
review process may be provided in the program 
application material. 

(c) If applications received by the application 
deadline are insufficient to utilize all of the funds 
allocated to a geographic region and urban or 
rural area, the partnership, at its discretion, may 
extend the application deadline for that region 
or area, funds allocated to regions, areas may 
also be reallocated by the partnership, in a man- 
ner defined by the partnership, if the available 
funds are underutilized within the region or area. 

(f) Upon completion of its review, the agency 
will determine whether funding approval will be 
granted or denied. The agency will notify appli- 
cants selected for funding in writing of the 
amount of funding awarded, the timeframe for 
the funding awarded and will provide additional 
information about the funding awarded. When 
the agency is unable to approve an application 
for funding, it will notify the applicant in writing 
and specify the reason for the denial of funding. 



Statutory Authority G.S. 
I22E-4; I22E-5; 122E-8. 



I22A-5; 122A-5.1; 



(2) 
(3) 

(4) 



(>) 



(IV) 



.0205 ADMINISTRATION 

(a) The agency will enter into a funding agree- 
ment with each applicant selected as a program 



recipient. The agreement will include, but not 
be limited to: 

(1) The amount of funding; 

The obligations of the recipient; 
The terms of the disbursement of funds 
from the Housing Trust Fund; 
The maximum loan or grant amount per 
housing unit assisted with program funds; 
and 

Provisions for the repayment of grants and 
loans to the Housing Trust Fund by re- 
cipients, subrecipients and their successors 
and assigns. 

The agency will periodically review the 
performance of project recipients according to 
the funding agreement. This will be done at least 
annually and may be done on a more frequent 
basis. 

(c) Recipients will submit such periodic reports 
as required by the agency to facilitate the moni- 
toring process. The reports will be described in 
greater detail in the program funding documents. 
The reports will include, but not be limited to, 
progress on the accomplishment of program ob- 
jectives including information on program bene- 
ficiaries and housing units improved and annual 
audited financial statements. 

(d) If the agency finds there has been substan- 
tial nonperformance under the funding agreement 
and the situation is not corrected within a period 
of time, as established in the funding agreement 
and after notice to the recipient of such finding, 
the agency may terminate or modify the agree- 
ment after written notice is provided. 

Statutory Authority G.S. 122A-5; 1 22 AS. I; 
I22E-4; 122E-5; I22E-8. 



NORTH CAROLINA REGISTER 



257 



FINAL RULES 



LJpon request from the adopting agency, the 
text of rules will be published in this section. 

W hen the text of any adopted rule is iden- 
tical to the text of that as proposed, adoption 
of the ride will be noted in the "List of Rules 
Affected" and the text of the adopted rule 
will not be republished. 

r\. dopted rules filed by the Departments of 
Correction, Revenue and Transportation are 
published in this section. These departments 
are not subject to the provisions ofG.S. I SOB, 
Article 2 requiring publication of proposed 
rules. 



TITLE 17 DEPARTMENT OF REVENUE 

CHAPTER 9 MOTOR FUELS TAX DIVISION 

SUBCHAPTER 91 - HIGHWAY FUEL USE TAX 

SECTION .0500 - REGISTRATION CARDS AND 
IDENTIFICATION MARKERS 

.0504 NO VEHICLE REGISTRATION 
REQUIRED 

A motor vehicle not designed by the manufac- 
turer for the purpose of pulling a trailer or mobile 
home and not modified to the extent that the 
vehicle becomes a tractor-type truck for the pur- 
pose of pulling a trailer is not required to be reg- 
istered. 

(1) A person installing a trailer hitch on a 
pickup type truck, whose bed has not been 
removed, in order to pull a trailer or mobile 
home, does not have to register the vehicle; 

(2) A person who removes the bed or shortens 
the chassis of a pickup type truck in order 
to pull a trailer or mobile home does have 
to register the vehicle. 

Histor\' Note: Statutory Authority G.S. 
105-262; 105-449.47 through 105-449.49; 
Eff January I. 1983; 
Amended Eff. July I, 1988; 
May I. 1987; March 1, 1987. 

TITLE 19A - DEPARTMENT OF 
TRANSPORTATION 

CHAPTER 3 - DIVISION OF MOTOR 
VEHICLES 

SUBCHAPTER 3D - LICENSE AND THEFT 
SECTION 



SECT ION .0800 - SAFETY RULES AND 
REGULATIONS 

.0801 SAFETY OF OPERATION AND 
EQUIPMENT 

(a) The rules and regulations adopted by the 
U.S. Department of Transportation relating to 
safety of operation and equipment (49 CFR 
Parts 390-398 - formerly Parts 290-298 - and 
amendments thereto) shall apply to all for-hire 
motor carrier vehicles engaged in interstate com- 
merce and intrastate commerce over the high- 
ways of the State of North Carolina, whether 
common carriers, contract carriers or exempt 
carriers. 

(b) The rules and regulations adopted by the 
U.S. Department of Transportation relating to 
safety of operation and equipment (49 CFR 
Parts 390-398 and amendments thereto) shall 
also apply to all private motor carriers engaged 
in the transportation of hazardous waste and ra- 
dioactive waste in interstate and intrastate com- 
merce over the highways of the State of North 
Carolina. 

(c) The rules and regulations adopted by the 
U.S. Department of Transportation relating to 
safety of operation and equipment (49 CFR 
Parts 390-398 and amendments thereto) shall 
apply to all private motor carrier vehicles on the 
highways of the State of North Carolina used in 
commerce to transport passengers or cargo: 

(1) if such vehicle has a gross vehicle weight 
rating of ten thousand pounds or more; or 

(2) if such vehicle is used in the transportation 
of materials found to be hazardous in ac- 
cordance with the Hazardous Materials 
Transportation Act as amended in Title 49, 
Code of Federal Regulations. 

49 CFR Part 395.3(b) shall not apply to any 
private motor carrier engaged in a seasonal en- 
terprise whenever any current seven or eight 
consecutive days, as defined by Part 395.2 (c) and 
(d), has been preceded by any 24-hour off-duty 
period as defined by Part 395.2(e) and the driver 
is on duty within a radius of 100 air miles of the 
point at which he reports for duty; and provided 
the driver has not been on duty more than 70 
hours in any seven consecutive days or more 
than 80 hours in anv eieht consecutive days. 49 
CFR Part 391.11 (bj (1), (b) (2), and (b) (6) shall 
not apply "to drivers employed by private motor 
earners who hold a valid North Carolina Driver's 
License as of June 1, 1988, or until such time that 
Part 383 (The Commercial Motor Vehicle Safety 
Act of 1986) shall be adopted by North Carolina. 

49 CFR Part 395.3(b) shall not apply to any 
intrastate motor earner engaged in a seasonal 
enterprise whenever any current seven or eight 
consecutive days, as defined by Part 395.2(c) and 



258 



NORTH CAROLINA REGISTER 



FINAL RULES 



(d) has been preceded by any 24-hour off-duty carriers who hold a valid North Carolina Driver's 

period as defined by Part 395.2(e) and the driver License as of June 1, 1988, or until such time that 

is on duty within a radius of 100 air miles of the Part 383 (The Commercial Motor Vehicle Safety 

point at which he reports for duty; and provided Act of 1986) shall be adopted by North Carolina. 

the driver has been on duty more than 70 hours 

in any seven consecutive days or more than 80 History Note: Statutory Authority G.S. 20-384; 

hours in any eight consecutive days. 49 CFR Eff. December 1, 1983; 

Part 391.11(b)(1), (b)(2), and (b)(6) shall not Amended Eff. July 1 , 1988; June 1, 1988. 

apply to drivers employed by intrastate motor 



NORTH CAROLINA REGISTER 259 



LIST OF RULES AFFECTED 



NORTH CAROLINA ADMINISTRATIVE CODE 
EFFECTIVE: June 1, 1988 



AGENCY 
DEPARTMENT OF ADMINISTRATION 



1 NCAC 19B 


.0101 - 
.0201 


.0103 




.0301 - 


.0303 


35 


.0103 

.0202 






.0302 - 


.0303 


DEPARTMENT Oh AGRICULTURE 




2 NCAC 9B 


.0016 
.0033 




9K 


.0102 




9M 


.0001 




38 


.0201 
.0301 
.0401 
.0402 




52 B 


.0204 




STATE AUDITOR'S OFFICE 


.0104- 




3 NCAC 1 


.0105 




.0202 - 


.0203 


3 


.0101 - 


.0104 




.0201 - 


.0205 




.0301 - 


.0304 




.0401 - 


.0415 




.0501 - 


.0508 




.0105- 


.0107 




.0206 - 


.0219 




.0305 - 


.0313 


4 


.0101 - 


.0103 




.0201 - 


.0203 


DEPARTMENT OF COMMERCE 




4 NCAC 2R 


.0902 




16A 


.0002 




161 


.0904 
.1003 




BOARD OF ELECTIONS 






8 NCAC 1 


.0002 - 


.0003 


6 


.0001 - 


.0003 


7 


.0001 - 


.0002 



ACTION TAKEN 



Temp. Adopted 
Expires 10-29-88 
Temp. Adopted 
Expires 10-29-88 
Temp. Adopted 
Expires 10-29-88 
Amended 
Amended 
Amended 



Amended 

Amended 

Amended 

Adopted 

Amended 

Amended 

Amended 

Repealed 

Amended 



Repealed 
Repealed 
Repealed 
Repealed 
Repealed 
Repealed 
Repealed 
Adopted 
Adopted 
Adopted 
Repealed 
Repealed 



Amended 
Repealed 
Amended 
Amended 



Repealed 
Repealed 
Repealed 



260 



NORTH CAROLINA REGISTER 



LIST OF RULES AFFECTED 



GOVERNOR'S OFFICE 








9 NCAC 2 


Executive Order Number 72 






Eff. 04- 


■26-88 






Executive Order Number 73 






Eff. 04-27-88 




DEPARTMENT OF HUMAN RESOURCES 




10 NCAC 3C 


.0307 




Adopted 


3J 


.5101 




Adopted 




.5201 




Adopted 




.5301 - 


.5302 


Adopted 




.5401 - 


.5404 


Adopted 




.5501 - 


.5507 


Adopted 




.5601 - 


.5603 


Adopted 




.5701 - 


.5705 


Adopted 




.5801 - 


.5802 


Adopted 




.5901 - 


.5907 


Adopted 




.6001 - 


.6006 


Adopted 




.6101 - 


.6102 


Adopted 




.6201 - 


.6202 


Adopted 




.6301 




Adopted 


7A 


.0601 - 


.0605 


Adopted 


7F 


.0107 




Amended 


10A 


.1205 




Amended 


10D 


.0702 




Amended 




.1008 




Adopted 




.1624 




Amended 




.1628 




Amended 




.1638 - 


.1641 


Adopted 




.2513 - 


.2514 


Adopted 


10E 


.0105 




Amended 


10F 


.0001 - 


.0002 


Amended 




.0028 - 


.0031 


Amended 




.0033 - 


.0034 


Amended 




.0039 - 


.0042 


Amended 


10G 


.0801 - 


.0803 


Adopted 


14C 


.1115 




Amended 




.1128 




Amended 


26D 


.0010 




Amended 




.0012 




Amended 


26G 


.0506 




Repealed 




.0601 - 


.0602 


Repealed 


26L 


.0001 - 


.0003 


Adopted 


DEPARTMENT OF INSURANCE 


.0105 




1 1 NCAC 6B 


.0101 - 


Temp. Adopted 








Expires 11-11-88 




.0201 - 


.0205 


Temp. Adopted 
Expires 11-11-88 




.0301 - 


.0304 


Temp. Adopted 
Expires 11-11-88 




.0401 - 


.0403 


Temp. Adopted 
Expires 11-11-88 



NORTH CAROLINA REGISTER 



261 



LIST OF RULES AFFECTED 



DEPARTMENT OF NATURAL RESOURCES AM) COMMUNITY DEVELOPMENT 

15 NCAC 2B .0311 -.0312 Amended 

16E .0101-0106 Adopted 

.0201 - .0202 Adopted 

DEPARTMENT OF TRANSPORTATION 

19A NCAC 3D .0201 Repealed 

.0203 -.02 14 Repealed 

.02 15 -.0231 Adopted 

.0801 Amended 

BOARD OF CERTIFIED PUBLIC ACCOUNTANT EXAMINERS 

21 NCAC 8A .0105 Amended 

8F .0103 Amended 

.040 1 Amended 

8G .0110 Amended 

.0201 - .0203 Amended 

.0208 -.02 12 Amended 

.0404 Amended 

811 .0001 Amended 

BOARD OK CHIROPRACTIC EXAMINERS 

21 NCAC 10 .0301 Repealed 

BOARD OF EXAMINERS OF PRACTICING PSYCHOLOGISTS 

21 NCAC 54 .1605 Amended 

Amended 



NCAC 54 


.1605 






.1701 - 


.1703 




.1801 






.1803 






.2401 - 


.2402 




.2501 - 


.2505 




.2601 




FINANCE 







Adopted 
Adopted 
Adopted 
Adopted 
Adopted 



24 NCAC 1M .0201 - .0205 Temp. Adopted 

Expires 11-09-88 



262 NOR TH CAROLINA REGIS TER 



NC AC INDEX 



TITLE/MAJOR DIVISIONS OF THE NORTH CAROLINA ADMINISTRATIVE CODE 
TITLE DEPARTMENT 

1 Administration, Department of 

2 Agriculture, Department of 

3 Auditor, Department of State 

4 Commerce, Department of 

5 Corrections, Department of 

6 Council of State 

7 Cultural Resources, Department of 

8 Elections, State Board of 

9 Governor, Office of the 

10 Human Resources, Department of 

1 1 Insurance, Department of 

12 Justice, Department of 

13 L^abor, Department of 

14A Crime Control and Public Safety, Department of 

1 5 Natural Resources and Community Development, Department of 

16 Education, Department of 

17 Revenue, Department of 

18 Secretary of State, Department of 
19A Transportation, Department of 
20 Treasurer, Department of State 

*21 Occupational licensing Boards 

22 Administrative Procedures 

23 Community Colleges, Department of 

24 Housing Finance Agency 

25 State Personnel, Office of 

26 Administrative Hearings, Office of 

NOTE: Title 21 contains the chapters of the various occupational licensing boards. 
CHAPTER LICENSING BOARDS 

2 Architecture, Board of 

4 Auctioneers, Commission for 

6 Barber Examiners, Board of 

8 Certified Public Accountant Examiners, Board of 

10 Chiropractic Examiners, Board of 

12 Contractors, Ficensing Board for 

14 Cosmetic Art Examiners, Board of 

16 Dental Examiners, Board of 

1 8 Electrical Contractors, Board of Examiners of 

20 Foresters, Board of Registration for 

21 Geologists, Board of 

22 I Iearing Aid Dealers and Fitters Board 
26 Fandscape Architects, Ficensing Board of 

28 Fandscape Contractors, Registration Board of 

31 Martial & Family Therapy Certification Board 

32 Medical Examiners, Board of 

33 Midwifery Joint Committee 

34 Mortuary Science, Board of 

36 Nursing, Board of 

37 Nursing Home Administrators, Board of 

38 Occupational Therapists, Board of 
40 Opticians, Board of 

42 Optometry', Board of Examiners in 



NOR TH CAROLINA REGIS TER 263 



NC AC INDEX 



44 Osteopathic Examination and Registration, Board of 

46 Pharmacy, Board of 

48 Physical Therapy, Examining Committee of 

50 Plumbing and Heating Contractors, Board of 

52 Podiatry Examiners, Board of 

53 Practicing Counselors, Board of 

54 Practicing Psychologists, Board of 

56 Professional Engineers and Land Surveyors, Board of 

58 Real Estate Commission 

60 Refrigeration Examiners, Board of 

62 Sanitanan Examiners, Board of 

63 Social Work, Certification Board for 

64 Speech and Language Pathologists and 

Audiologists, Board of Examiners of 

66 Vcterinarv Medical Board 



264 NORTH CAROLINA REGISTER 



CUMULA TIVE INDEX 



CUMULA TIVE INDEX 

(April 1988 - March 1989) 





1988- 


1989 




Pages 






Issue 


1 - 

26 - 
109 - 


25 
108 
118 . . 




1 -April 
2- April 

3 - May 

4 - May 

5 - June 


119 - 
146 - 


145 
184 . . 




185 - 


266 . . 




6 - June 



AO - Administrative Order 

AG - Attorney General's Opinions 

C - Correction 

E - Errata 

EO - Executive Order 

EDL - Einal Decision Letters 

ER - Final Rule 

GS - General Statute 

JO - Judicial Orders or Decision 

LRA - list of Rules Affected 

M - Miscellaneous 

NP - Notice of Petitions 

PR - Proposed Rule 

SO - Statements of Organization 

TR - Temporary Rule 



ADMINISTRATION 

State Construction, 187 PR 

Youth Advocacy and Involvement Office, 148 PR 

ADMINISTRATIVE HEARINGS 

Hearings Division, 76 PR 

COMMERCE 

Milk Commission, 120 PR, 190 PR 

CRIME CONTROL AND PUBLIC SAFETY 

Alcohol Law Enforcement, 47 PR 

ELECTIONS 

State Board of Elections, 120 PR 

EXECUTIVE ORDERS 

Executive Orders 68-71, 1 EO 



72,119 EO 
73, 146 EO 



NOR TH CAROLINA REGIS TER 265 



CUMULA TIVE INDEX 



FINAL DECISION LETTERS 

Voting Rights Act, 5 FDL, 26 FDL, 185 FDL 

HUMAN RESOURCES 

Division of Aging, 229 I'R 

Drug Commission, 113 FR 

Health Services, 7 PR, 220 PR 

Medical Assistance, 7 PR, 30 PR, 109 PR, 121 PR, 237 PR 

Office of the Secretary, 3 1 PR 

Social Services Commission, 27 PR 

INDEPENDENT AGENCIES 

Housing Finance, 21 PR, 134 PR, 255 PR 

INSURANCE 

Agent Services, 238 PR 

Fire and Casualty, 32 PR 

Fire and Rescue Services Division, 122 PR, 149 PR 

LICENSING BOARDS 

CPA, 73 PR 

Examiners of Flectrical Contractors, 151 PR 
Hearing Aid Dealers, 77 FR 

LIST OF RULES AFFECTED 

April 1, 198S, 102 LRA 
May 1, 1988, 137 LRA 
June 1, 1988, 260 LRA 

NATURAL RESOURCES AND COMMUNITY DEVELOPMENT 

Coastal Management, 11 PR, 67 PR, 254 PR 

Community Assistance, 69 PR 

Lnvironmental Management, 241 PR 

Forest Resources, 68 PR 

Marine Fisheries, 62 PR 

Soil and Water Conservation, 1 1 1 PR 

Wildlife Resources, 1 1 1 PR 

REVENUE 

License and Excise Tax, 113 FR 
Motor Fuels Tax, 258 FR 

SECRETARY OF STATE 

Securities Division, 125 PR 

STATE PERSONNEL 

State Personnel Commission, 135 PR 

STATE TREASURER 

Local Government Commission, 18 PR 

TRANSPORTATION 

Division of Motor Vehicles, 172 FR, 258 I'R 



266 NOR TH CAROLINA REGIS TER 



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